Clause
125
Reports
categorising English local
authorities
Question
proposed, That the clause stand part of the
Bill.
The
Chairman:
With this it will be convenient to discuss new
clause 4— Amendment of Local Government Act
2003—
‘Section 99 of the
Local Government Act 2003 (c. 26) (categorisation of English local
authorities by reference to performance) is hereby
repealed.’.
Mr.
Syms:
It is at this stage of the Bill that one forgets why
one tabled amendments. Nevertheless, I suspect that it is because the
Secretary of State’s element is so direct. That is what we
object to in a devolutionary Bill. I should be grateful if the Minister
said a little more about what impact the new clause might have on the
legislation, and then I shall decide whether we will press it to a
vote.
Mr.
Woolas:
Although I hope to persuade the hon. Gentleman not
to press it, new clause 4 is a useful device for debating the new
performance regime. It is a good probing new
clause.
Andrew
Stunell:
Even though he did not know
it.
Mr.
Woolas:
To be fair to the hon. Gentleman, I have the
assistance of my hon. Friend the Under-Secretary. The hon. Member for
Poole is without his hon. Friend the Member for North-East
Bedfordshire, who we understand is detained on other parliamentary
business. I say that for two reasons: first, because it is true, and
secondly, because I may need him to say it to me later. I shall explain
the change to the performance
regime, because there is inevitably some jargon in such matters. New
clause 4 teases out what has been talked about.
Formally, clause 125 will amend
the requirement in section 99 of the Local Government Act 2003 for the
Audit Commission to produce reports on its findings on local
authorities’ performance in exercising their functions. The
reports place the authorities into categories according to their
performance—one star, two stars, three stars and four stars.
Hon. Members will be familiar with
that.
The
forthcoming reform of the inspection of local services will mean a move
away from rolling programmes of inspection that result in performances
categories, which are currently known as comprehensive performance
assessments. In future, inspection will be carried out according to
risk. That will reduce the burden on better performing authorities and
focus resources where improvement is most needed. In other words,
inspections will not be carried out for their own sake; they will be
carried out on an assessment of risk—something that I will go on
to explain when we discuss the potential consequences of proposed new
clause 4.
The changes
to section 99 are being made because the current requirement for the
commission to undertake a categorisation report into the performance
league tables is too prescriptive and we wish to allow more
flexibility. If a regular inspection based on performance is not
carried out, it is nonsense to categorise every body as the Audit
Commission is currently required by law to do. Clause 125 gives the
Secretary of State a power of direction—the hon. Member for
Poole was right to point that out, because it appears that the
Secretary of State is taking rather than giving away a power. The
Secretary of State is taking the power to enable rather than to
require—an important distinction—the Audit Commission to
undertake a categorisation report in circumstances where that is
desirable and useful. In other words, if a council has been identified
by the Audit Commission as not performing well, it is able to undertake
a categorisation report in certain circumstances.
The categorisation will include
the direction of travel, to use the jargon. The CPA reports from last
week say that one council’s performance category has moved down,
but its direction of travel is up. In layperson’s terms, a
couple of years ago, the council was doing badly but has since started
to improve. Two variables are in place, and the inclusion of direction
of travel is a useful tool for focusing management and motivating
staff.
There seems to
be no correlation between the electoral performance of the majority
party or the party in power and categorisation by stars. There is
evidence of a correlation in some cases, but I guess that that is down
to the whims of the electorate.
The proposed move to the
comprehensive area assessment, which is a change from performance to
risk assessment, and which draws on a wide range of evidence, means
that a blanket categorisation report will not be required. New clause
4, as the hon. Member for Poole said, proposes changes to section 99,
which currently obliges the Audit Commission to produce a report that
sets out its findings. The commission has to carry out a comprehensive
performance assessment to determine the categorisation of an authority.
As proposed, new clause 4 will prevent the changes to
section 99 that I hope I have convinced the Committee are desirable. The
repeal of section 99 would remove the Audit Commission’s
obligation to produce reports.
The new
performance framework was set out in the local government White Paper.
I emphasise that it came about as a result of substantial consultation
that took place over two years; that it carries a cross-party consensus
within the Local Government Association; and that it carries the
support of the Audit Commission. The new framework, in line with the
rest of the Bill, seeks to strengthen accountability to residents and
communities by increasing choice that is informed by timely
information, and by providing a means of redress for when things go
wrong. The White Paper set out proposals for the introduction of the
comprehensive area assessment in place of the comprehensive performance
assessment. That means that in future, the area as well as the
institution will be judged from the point of view of the resident or
citizen. It is about the services—the outcomes—that are
received. “Outcomes” is another of those jargon words
that I hate, but it is common parlance so I am forced to use
it.
The impact on the
citizen is being judged as well as the impact on the institution, and
the assessment is of the service received by the citizen, rather than
the performance of the council. To judge the service received by the
citizen, one has to inspect the bodies and institutions that are
collectively delivering services, hence the comprehensive area
assessment, which we hope and intend will provide for an assessment of
an area. That will give the headline writers some copy, but that
provision is more in tune with the needs of the citizen and will
benefit them.
Finally,
I should like to explain how the clause will enable the comprehensive
area assessment and why new clause 4—a probing
amendment—is not
required.
12.15
pm
Mr.
Syms:
May I push the Minister a little on how he would
define an area? Does he mean an area within a local authority? Is he
talking about dividing the local authority into different areas because
service delivery may be different in different parts of a local
authority, or does he mean beyond a local
authority?
Mr.
Woolas:
It means the local authority area. A local
authority area is not mentioned because it is not just the local
council that delivers the service. For example, it is about looking at
Poole as a whole and recognising that the hon. Gentleman’s
constituents receive services from various sources commissioned or
directly provided by the local council. As we all acknowledge, the
citizen does not need to know, and does not much care about, the
structures behind the delivery of that
service.
The CAA
comprises four elements, including an assessment of the risks in an
area and how well those are being managed. For example, a consideration
may be whether there is a risk of the refuse service
collapsing.
Mr.
Burrowes:
In relation to the comprehensiveness of the CAA,
would it entail another tier of government, such as the Greater London
authority, which covers my constituency, Transport for London
and other bodies? From the point of view of the citizen, in respect of
outcomes, they see what happens on the North Circular road as an
outcome that needs to be provided, whether by the borough council or
Transport for
London.
Mr.
Woolas:
The CAA covers services provided by or for the
local authority. With regard to other bodies, the Audit Commission
covers the GLA. It could include such a judgment of an outcome in the
assessment of the GLA and the Mayor as well, but we intend it to do
exactly what the hon. Gentleman says and consider the area. The citizen
in his constituency does not really care who provides the maintenance
on the North Circular. As somebody who used to cycle round it, I think
it should be
inspected.
Mr.
Syms:
So in the case of Enfield there is an area
agreement, but there would, presumably, also be an assessment of the
GLA. The good burghers of Enfield would be able to see the area
assessment for their area, but they would only be able to assess the
GLA assessment on a London-wide basis and service delivery may be
different in Enfield from that in Bethnal Green and Bow. Would it be
appropriate, for an authority of the size of the GLA, to break down how
a service is delivered in each
borough?
Mr.
Woolas:
The hon. Gentleman makes an important point, which
his new clause has brought to light, which shows that even if one does
not know what the intention of an amendment is, it can sometimes have
beneficial consequences in shedding light on proposed legislation. He
highlights a point that has been debated. The comprehensive area
assessment does not cover the GLA, as he said. The Audit Commission can
and will inspect the GLA separately, which then raises the point about
the functions of the GLA or its delivery bodies within the area that is
to be inspected. It is of course open to the commission to pass comment
on that. What it cannot do is judge the performance of the local
authority in respect of that area. It cannot hold the council
responsible for the things that it is not responsible for, but it can,
in its assessment, draw attention to the area and judge it as a whole.
That is how better joining-up will come about.
Citizens, and therefore the
inspectorate, do not care who is responsible for the services. They
just want the problems sorted out. What one could not do is hold the
council directly responsible for everything that goes on within the
area. The hon. Gentleman puts his finger, perhaps inadvertently but
with wisdom, on the very point of a comprehensive area
assessment.
Let me
finish the four points, and I said that I would be brief. The
comprehensive area assessment is an assessment of the risk in an area
and how well that risk is being managed. We all know that councils can
have problems that they do not do anything about. That is significantly
worse than a council that has a problem that it is trying to address. A
judgment on the use of resources is crucial. Is it using its resources
properly in respect of the functions? Then there is the pace and the
likelihood of improvement followed by the report on performance against
national indicators for each local authority area.
Those four
judgments taken together will provide a simple assessment of
performance in an area. That means that a blanket categorisation report
is unlikely to add to the information about a locality, which is the
information that builds up the picture of the CAA. The new framework,
therefore, places greater emphasis on giving power to individual
residents and their communities to require the personalisation of
service delivery. That gives them more say in the running of local
services and the right to propose suggestions or require action from
their local authorities, notwithstanding the accountability assessment
regime we see in other aspects of the Bill. We have talked about the
best value duty in clause 106 and about overview and scrutiny. The
framework provides another piece of the jigsaw.
Where the
provision of clear, consistent and transparent information will help
local people make an informed view of the quality of services, then
provision should be made for such information to be made available. The
new clause, which I urge the hon. Gentleman not to press, has brought
out the opportunity for me to explain the purposes of the comprehensive
area assessment and to explain to the Committee how the beautiful
tapestry of Government policy is coming together to provide a new
framework that will empower the people of this
country.
Mr.
Syms:
It has been a useful debate and rather more
useful than I had expected. I am glad that the Minister has had the
opportunity to put on record how he sees things unfolding. I beg to ask
leave not to press the new
clause.
The
Chairman:
The new clause is not being moved at the moment,
so is the hon. Gentleman giving notice that he is not going to move it
at the appropriate
time?
The
Chairman:
That is very helpful to the
Chair.
Question put
and
agreed
to.
Clause 125
ordered to stand part of the
Bill.
Clause
126 ordered to stand part of the
Bill.
Clause
127
Agreed
audit of
accounts
Question
proposed, That the clause stand part of the
Bill.
The
Chairman:
With this, we may discuss the following:
Government new clause 11— Appointment of
auditors.
Government
new clause 12—Inspection and disclosure of personal
information.
Government
new clause 13—Appointment of auditor to carry out agreed
audits.
Angela
E. Smith:
I want take the opportunity to say something
about the new clauses. It would be helpful to the Committee if I
explain that new clause 11 will have been in section 3 (6) of
the Audit Commission Act 1998. That Act requires all members
of the firm
appointed by the Audit Commission to carry out an audit to be members of
specified accountancy bodies such as the Chartered Institute of Public
Finance and Accountancy, which means they have to be qualified
accountants. In reality, this provision is now out of date, as most
firms are now multi-disciplinary partnerships and it would be difficult
for every single member of that body to be a qualified accountant. This
does not mean that unqualified staff will be able to undertake audits.
The new clause retains the requirement in section 3(6) for membership
of the specified accountancy bodies, but this will apply only to the
person who is conducting the audit rather than all the employees of a
firm, which makes common sense.
Michael
Fabricant (Lichfield) (Con): Would that include certified
accountants?
Angela
E. Smith:
As a former sixth-form student and not a
certified accountant, I sought enlightenment on this and I can assure
the hon. Gentleman that, having received such enlightenment, it does.
The point is that they are fully qualified accountants.
New clause 12 amends section 15
of the Audit Commission Act 1998, which allows any interested person to
inspect the accounts to be audited, plus all documents relating to
them, such as bills, receipts, contracts and vouchers. We are concerned
about the release of personal details of people who have had dealings
with the council in a personal capacity, where they may have paid for a
service or may have received benefits. These persons will have their
personal details, such as names and addresses, the type of benefit and
the nature of services received, on documents that are held by the
council, which may then be available for inspection by other members of
the public. This is not appropriate and the new clause provides that
personal information that could identify an individual must be removed
from documents prior to inspection by the public. A similar provision
already exists for members of staff and we are merely extending that to
every individual. There are some circumstances in which it may be
desirable to disclose personal information, which may be used to ensure
transparency—for example, relating to a contract or to a
council’s expenses. Therefore, it is for the auditor to have the
discretion to decide whether that information should be
disclosed.
New clause
13 amends section 29 of the Audit Commission Act. Section 29 allows the
Audit Commission to do the audit of accounts of bodies connected with
local government or the NHS if such a body requests the commission to
do so, and if the Secretary of State gives consent. However, the way
this section is drafted does not reflect good practice. In practice,
although the commission undertakes audits, in the majority of cases it
appoints auditors to undertake audits on its behalf. The new clause
provides that the commission may appoint an auditor to undertake audits
under section 29.
I hope that I have explained the
new clauses. I commend the clause to the Committee.
Question put and agreed
to.
Clause 127
ordered to stand part of the
Bill.
Clause
128 ordered to stand part of the
Bill.
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