Sustainable Communities Bill

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New Clause 1

Local spending reports
‘(1) For the purpose of assisting in promoting the sustainability of local communities, the Secretary of State may make arrangements for the production, by the Secretary of State or another person, of local spending reports.
(2) A local spending report is a report on expenditure by such authorities, in such area, and over such period, as are determined in accordance with the arrangements.
(3) The authorities may be—
(a) a principal council;
(b) a government department;
(c) any other person exercising public functions.
(4) The area may be—
(a) one or more local authority areas;
(b) one or more parts of a local authority area;
(c) any combination of those.
(5) The period may be or include a future period.
(6) The expenditure to be included in relation to any authority, area or period is to be determined in accordance with the arrangements.
(7) A report may relate to different areas or periods for different authorities.
(8) The Secretary of State may make different arrangements for different reports.
(9) Before making arrangements under this section, the Secretary of State must consult such persons likely to be affected by the arrangements as the Secretary of State thinks appropriate.
(10) For the purposes of subsection (9) any consultation undertaken before the commencement of that subsection isas effective as it would have been if undertaken after that commencement.’.—[Mr. Woolas.]
Brought up, and read the First time.
Mr. Woolas: I beg to move, That the clause be read a Second time.
The Chairman: With this it will be convenient to discuss the following amendments to the proposed new clause: (a), in line 2, leave out ‘may’ and insert ‘shall’.
(c), in line 2, leave out ‘may’ and insert ‘must’.
(b), in line 7, leave out ‘may’ and insert ‘shall’.
(f), in line 9, after ‘department’, insert
‘(c) a fire and rescue authority;
(d) a National Park authority;
(e) the Broads Authority;
(f) a police authority;
(g) a chief officer of the police;
(h) a waste disposal authority established under section 10 of the Local Government Act 1985 (c.51);
(i) a metropolitan county passenger transport authority established by section 28 of the Local Government Act 1985 (c.51) (joint arrangements);
(j) a primary care trust;
(k) a development agency established by section 1 of the Regional Development Agencies Act 1998 (c.45);
(l) a local probation board established by section 4 of the Criminal Justice and Court Services Act 2000 (c.43);
(m) a youth offending team established under section 39 of the Crime and Disorder Act 1998 (c.37);
(n) the English Sports Council;
(o) the Environment Agency;
(p) the Health and Safety Executive;
(q) the Historic Buildings and Monuments Commission;
(r) the Learning and Skills Council for England; and
(s) Natural England.’.
(g), in Line 10, leave out ‘(c)’ and insert—
‘(3A) The authorities may be’.
(d), in Line 11, leave out ‘may’ and insert ‘must’.
(e), in Line 13, at end insert ‘or’.
Mr. Woolas: We are making progress, Mr. Cummings, and I am grateful to you for that. The new clause contains the Government’s proposals for the resource mapping process. I believe that there is broad agreement on its framework, which we discussed in our sitting on 2 May. Amendments have been tabled to the new clause, and we might wish to debate them briefly, but I do not want to detain the Committee.
The local spending reports covered in the new clause come from a power of the Secretary of State to make such arrangements and could effectively cover all public expenditure in each local authority area, both current and future spending. That is an important point. I am giving away birthday cakes here, and Opposition Members are not—[Interruption.] They are pleased; I thought that they were not writing it down. The Committee discussed on 2 May the difficulties of defining local and not local spending, and I reported back on the consultation across government on some of the issues.
The amendment that I have tabled includes a dutyto consult interested parties so that we do not simply impose a process from Whitehall. The costs of producing the local spending report must be limited. However, the power should contain the flexibility to allow the report to focus on proposed expenditure within county areas or, alternatively, a break down for counties and a break down for districts, or simply a break down for each district. In two-tier areas, that it important.
The outcome might be a simple report that identifies how much money is to be spent in each area by partner authorities and if they do not spend it themselves, which is increasingly the case, who does.
The original clause distinguishes between funding for primarily national or for local priorities. Much expenditure could legitimately be said to be either. We think that it is more powerful to be able to identify the totality of funding that may be spent in each area. That exercise would be based largely on existing—and possibly on currently available—information. The aim of the task would be to quantify expenditure that can easily be identified as relating to a particular local authority area. The intent would be to understand in broad terms how much money local partners and communities are responsible for. The intent would be not to create an artificial split as to what funding might go where, but to identify as well as possible what is to be allocated to where. The purpose would be to help local authorities, their partner agencies and their residents and community groups to plan better.
Mr. Cummings, is it desirable to you that I should move amendments (c), (d) and (e), which stand in my name?
The Chairman: You should speak to them at this stage.
Mr. Woolas: Very well, Mr. Cummings. The amendments reflect an earlier discussion in this Committee. Amendment (c) reflects the Committee’s wish that the Secretary of State should be under a duty to make arrangements for the production of local spending reports. It replaces the word “may” with the word “must”.
Mr. Letwin: Why will the Minister not move amendment (b), which seems to be entirely in line with his amendments (c), (d) and (e)? Does he object to (b), or did he just happen not to move it?
Mr. Woolas: I am coming on to that; I should have explained. Let me first finish my argument on amendment (c). I hope that there is agreement on replacing in subsection (1) of new clause 1 the word “may” with the word “must”. Amendments (d) and (e) reflect a similar wish. They amend subsection (4) of new clause 1 and require that the areas covered by the report should be one or more local authority areas, one or more parts of a local authority area or any combination of those.
Let me explain my difficulty with amendments (b), (g) and (f). New clause 1 provides a degree of flexibility—that is not to allow the Government to back out of their obligations. I repeat: we have tabled new clause 1 because we believe that a clear benefit can be gained from identifying what public expenditure is spent in each area. It will make the planning and decision-making process more transparent and accountable and will help partners to make better informed decisions. The flexibility is there because nobody yet knows how to achieve that. There is a requirement in the new clause for the Secretary of State to consult the people who will benefit from it. That means that we can design a process that is fit for purpose. It seems strange to me to design out such flexibility and to circumscribe the consultation even before it takes place.
3.45 pm
I also have a slight concern about taking a list of authorities agreed for the purposes of one piece of legislation and simply copying it into another pieceof legislation. For example, it is unnecessary toname authorities. The intent to include appropriate authorities is already provided for. It will be confirmed by consultation and written into arrangements. There is no need to name authorities in the Bill. It is also potentially onerous to do so. Not all named authorities allocate funding according to local authority boundaries and, as I explained earlier, there is often a perfectly legitimate business case for not doing so.
Our aim is not to create an artificial split in what funding might go from which agency to which area, but to create transparency for the funding that can be influenced in a local area. Listing partner authorities could incur substantial effort for no gain. As I have also said before, in this case “may” implies “must”, so this is not a simple list of suggestions. As I have already made clear, it is important that we consult and make the production of local spending reports as useful and efficient as possible. As nobody knows how best todo this yet, I believe that it is wrong to write into the Bill specific requirements which may undermine, unintentionally, the usefulness of the reports.
In short—[Interruption.] I hear a “Hear, hear.” Having looked at this, and we have had some time now to consult in Whitehall, we believe that this is the best way to do it. This will be one of the main benefits of the Bill, because it will put in the public domain what the spending is. Kent county council have done so. Other councils, including my own, have done so. It will show the public what the spending is and generate significant debate and disagreement in local areas. We have the confidence in this process to say that we should put that information out there because it will result in better involvement, higher turn-outs in elections and efficiencies in public spending. This is a key part of the Bill. However, I do not want to prescribe in too much detail before we ask local authorities to do so.
Mr. Hurd: I am delighted that the Minister shares the Committee’s enthusiasm for this clause. There may even be a feeling in the Committee that the full ramifications of the clause have yet to be fully understood outside the Committee Room. It could be the catalyst for some very vigorous debate. It is therefore essential that we get it right. I congratulate the Minister and his officials on getting to the right place after a disappointing start. The right place is one word, a “must” in line 2. That is the crucial change. Everything else is secondary, in our view.
I have followed the Minister’s arguments carefully. He has had a solid afternoon and I am delighted to tell him that he is likely to end on a victory because the main achievement has been banked, which is the change to line 2. I should explain amendments (f) and (g) very briefly. They are designed to remove any doubt from the process and to show to an external audience exactly who we mean in this process. That explains the long list of authorities that are parties to local areas agreements and listed in the existing legislation. I am persuaded by the Minister’s arguments for possibly the first time this afternoon, but I am more than happy to leave it open to members of the Committee to express their views.
Julia Goldsworthy: I do not really have anything else to add. The hon. Member for Ruislip-Northwood has summed it up particularly well. Perhaps the Minister will feel like having another drink once this sitting is over.
Mr. Woolas: I am grateful for those comments.I believe that this clause will give real impetus to localism. I am grateful for the support of the Committee.
Question put and agreed to.
Clause read a Second time.
Amendments made: (c), in Line 2, leave out ‘may’ and insert ‘must’.
(d), in Line 11, leave out ‘may’ and insert ‘must’.
(e), in Line 13, at end insert ‘or’.—[Mr. Woolas.]
Clause, as amended, added to the Bill.

New Clause 3

Local spending reports: rights of principal councils and representatives of local persons
‘(1) After considering the information contained in a local spending report issued pursuant to section 4, a principal council may make recommendations to the Secretary of State as to—
(a) whether that council could decide how any part of the money specified in that report may be spent; and
(b) any consequential delegation of functions to the council.
(2) Where a principal council proposes to make recommendations pursuant to subsection (1), it must—
(a) refer the matter to any panels under section 3 for consideration; or
(b) establish such panels if they do not exist and refer the matter to them for consideration.
(3) A principal council and any panels acting pursuant to this section shall exercise their functions to promote the sustainability of local communities.
(4) Within three months of receiving recommendations made by a principal council under subsection (1), the Secretary of State shall either adopt or reject each of the recommendations, and in either case shall give reasons for his decision.
(5) At least once in each calendar year the Secretary of State shall publish a report providing details of all decisions taken pursuant to subsection (4) above.’.
Brought up, and read the First and Second time.
Amendments made: (a), in Line 2, leave out ‘may’ and insert ‘subject to subsection (2)’.
(b), in Line 6, at end insert—
‘(2A) A principal council may not make recommendations regarding any money that has been specified in the local spending report as being spent on services of a wider or national significance.
(2B) In subsection (2) “services primarily of a wider or national significance” means services provided wholly or largely for the benefit of persons resident in areas wider than the area of the council.’.
(c), in Line 12, leave out ‘shall’, insert—‘(a) ’.
(d), in Line 13, at end insert ‘and
(b) have regard to the council’s community strategy prepared pursuant to section 4 of the Local Government Act 2000 (c.22);
(c) specify that in their opinion any recommendations are consistent with that community strategy; and
(d) give their reasons for that opinion.’.—[Mr Hurd.]
Clause, as amended, added to the Bill.
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