Mr.
Khan: I thank the hon. Gentleman for his well-articulated
concerns. I agree that we need to keep costs to a minimum. We do not
want wastage, and we need to ensure that there is a disincentive in
respect of it. One reason for trying to synchronise the collection,
with the BRS collected as part of the annual billing round, is to
minimise cost duplication. On his point about reassurance, in the
consultation for the secondary legislation we will set out the details
of the administrative costs incurred in collection or recovery. That
consultation is important. He may be reassured because he will be able
to respond to the consultation and see the other responses. He is right
that we cannot have a situation in which the upper-tier
authority’s general revenue account is incurring an additional
cost because of the failure to synchronise the collections. I hope that
he will become involved in the consultation and that we can assure him
that there is no additional
wastage. Question
put and agreed
to. Clause
22 accordingly ordered to stand part of the
Bill. Schedule
2Accounting Question
proposed, That the schedule be the Second schedule to the
Bill.
Robert
Neill: Perhaps the Minister can help us with an issue
regarding paragraph 3(2), and in particular 3(2)(a), on refunds and
credits. I understand the concept
behind the regulations, but this measure gives a permissive power for
the regulations to provide, in effect, for a refund to the billing
authorities. I do not have a problem with that, but I notice that the
refund is referred to as
being “in
equal proportions to each billing
authority”. I
take it that that means exactly what it says, but is that always the
fairest means of carrying out the
refund? 10
am Might
it not be appropriate to consider a refund that does not involve equal
shares across the board, but which is in proportion to the contribution
that has been made by each billing authority? Let us say that there are
five billing authorities in a BRS scheme. Depending on how the BID is
constructed, some of the billing authorities may have put more into the
pot than others. However, as I read the regulations, the refund would
be split to give them each a fifth of any refund. However, one of those
five authorities might have contributed 30 per cent. and another 40 per
cent. of the revenue from businesses in their area, with the others
contributing rather less. Should not provision for that be reflected in
the regulations? Perhaps the same consideration ought to be given where
a BRS covers more than one top-tier authority area. The aim is to have
the extra flexibility needed to provide the just result in such
cases.
Dan
Rogerson: The hon. Gentleman makes a good point. I can
think of a number of counties where district or borough authorities are
different sizes and have different concentrations of businesses
communities that might be affected. I look forward to hearing the
Minister’s
response.
Mr.
Dunne: I seek your guidance, Mrs. Dean, on
whether now is the appropriate point to raise an issue, because I could
not find what seemed an appropriate moment anywhere else in the Bill.
Please guide me properly if I stray out of
order. It
is quite proper that the potentially large sums being raised for
substantial projects over a prolonged period should be accounted
for. The schedule sets the rules under which the accounting
would work, but I see nothing in the Bill that identifies where the
accounting information goes or the extent to which that is made public
to either the levy payers or the citizens in the area who are subject
to the scheme. In particular, there is nothing to show the progress
relating to the expenditure of these sums or whether the project is on
budget, according to the estimate made at the
outset. A
lot of clauses refer to the preparatory phase and to setting up a levy,
but there is little about monitoring the levy during the period of its
operation until such time as a refund may apply—at the end of
it. There seems to be a lacuna in the middle. Will the Minister say how
that will be dealt
with?
Mr.
Binley: I seek your guidance, too, Mrs. Dean,
because the schedule deals with refunds and credits and I am concerned
about the total lack of any comment about refunds to the taxpayer,
should the estimate for a given project be over-generous and there is a
surplus at
the end of it. I see that refunds may be returned, but the schedule does
not specify to whom they should be returned, other than mentioning the
billing authority. Is this the correct time to mention that or should I
mention it in the debate on clause 24, which also deals partly with
this
matter?
The
Chairman: It would be satisfactory to deal with it under
this
schedule.
Mr.
Binley: Thank you, Mrs Dean.
The
calculation of the cost of a given project sets the rate thereafter,
irrespective of how long the project lasts. The whole thing will be
framed, in terms of collection, and laid out in the initial prospectus.
I understand that. However, I am concerned that Government projections
are sometimes not as accurate as we would like them to be. I have heard
that concern echoed even more loudly at local government level over the
12 years that I have been a county councillor. Will the Minister help
us by explaining how we will have some control, other than by the
measures set out in the schedules, over the efficacy of the accounting
processes for the initial prospectus; and if the prospectus is totally
wrong, how that money might be returned to the taxpayer, bearing in
mind that some of the projects will carry on for some
time?
Mr.
Khan: I thank all hon. Members who have spoken and will
deal with each of their comments in turn by contextualising schedule
2. The
White Paper emphasised the importance of security and accountability to
the business community to maximise the benefits of BRS. It will
therefore be essential to have in place a robust set of accounting
arrangements, and the Bill places certain requirements on the levying
and billing authorities. As I said earlier, we will soon publish a
consultation paper setting out our proposals for secondary legislation,
including those for the accounting arrangements, and those will
complement the Bill’s main provisions.
The hon.
Member for Bromley and Chislehurst made a good point, as he often
does—it pains me to say that—and clearly the example he
gave applies not only to proportions in cities that we know about, such
as London, but to different proportions outside London, which the hon.
Member for North Cornwall also mentioned. That is one of the options
that should and will be looked at during the consultation. The anal
answer I can give him is that paragraph 3(1) gives us the general power
and paragraph 3(2) is just a list of examples, but he makes a good
point that we need to come back to along with other
matters. Levying
authorities that impose a BRS must keep a BRS account for each one they
operate. That will be similar to the BID revenue accounts that
authorities are required to have for BIDs that are established in their
areas. When the Greater London authority enters into an arrangement
with one of its functional bodies, as set out in paragraph 3, that body
will similarly be required to keep a BRS revenue account. If two or
more levying authorities act jointly, each authority must have its own
BRS revenue account to ensure appropriate transparency and
accountability.
The hon.
Member for Ludlow made an important point about transparency during the
process and how people will be made aware of what is happening, and as
I mentioned, we will shortly set out our proposals in a
consultation paper. Local authority accounts, as he is aware, are open
to the public. Although the prospectus sets out what to do in case of
variations, I take his point about the need to see the work in progress
and how things are going. That is one of the things that we hope to
clarify during the consultation and receive comments about the best way
of doing so. He is right to say that that is particularly relevant to
BRS schemes, which by definition are long. As we know from long-term
projects, there could be a rollercoaster ride and we need to ensure
that key stakeholders are kept on side. One way of doing so is through
transparency. Mr.
Dunne: The Under-Secretary will recall from his time on
the Public Accounts Committee, on which we have both served, that the
primary scrutiny body for Parliament took the view that it would be
appropriate, as with major projects, to review the performance of the
Olympic Delivery Authority annually during construction for the
Olympics. Perhaps an annual review should also be considered for
projects such as Crossrail or other substantial projects subject to
BRS.
Mr.
Khan: The hon. Gentleman knows, as I do, that the current
Mayor is keen to have transparency, with all his laundry out in the
open, so I have no doubt that the GLA, the Mayor, London MPs, the
Government and businesses, whether corporations or those in Canary
Wharf, will want to ensure transparency throughout the process. The
example he gave from the PAC is a really good analogy, and he will be
aware that the National Audit Office is identifying lessons to be
learnt during the process, rather than just at the end. As we lead up
to the Olympics, the NAO is looking at how money has been spent and
whether it represents value for money. We would expect that sort of
rigour to be applied to such a project because it involves money not
only from BRS, but from general taxation, including money from
Transport for London and voluntary contributions. His point is well
made and needs to be addressed during consultation on the secondary
legislation.
The Bill also
provides for billing authorities, in the first instance, to pay BRS
revenues into their collection fund, in the same way as they do council
tax and non-domestic rate revenues. However, an important difference
between NDR and BRS is that BRS revenue will not be paid into the
central Government NDR pool, but will instead be retained locally and
transferred to the levying authority. I know that the hon. Member for
Northampton, South is concerned that central Government will somehow
gobble up this locally raised money. That is unfair because the clause
confirms that the money is retained locally, to be spent
locally.
Mr.
Binley: The Under-Secretary of State misunderstands me. I
have no concerns about central Government leeching some of this money
away—he might be pleased to know that— and I am sure that
is not the intention under the Bill. I am concerned first about
accountability, particularly with long-term projects. Secondly, I am
worried that money may be leeched away either at the billing level or
at the levying authority level, used for other purposes and rather
cleverly accounted for as part of the administrative cost. The final
point was about refunds—to the taxpayer, not the billing
authority—where an overestimation had been made in the initial
prospectus.
Mr.
Khan: For the record, it was the hon. Gentleman who first
used “leeching”, not me, but I will use
“leeching” as a response to his introduction of the word.
God forbid that central Government ever leeches from local councils or
taxpayers.
I understand
the hon. Gentleman’s concerns. The proposed secondary
legislation governs accounting arrangements. It needs to cover, and
will cover the following key areas: refunds to ratepayers of, for
example, unspent BRS revenue; credits and debits to the BRS revenue
account; handling of voluntary contributions; transfer of BRS revenue
from the collection fund to the BRS revenue account; and surpluses and
deficits of BRS. I take his point that we cannot have imaginative
accounting processes, whereby items other than those that the Bill
defines as administrative expenses are brought under that
cover.
Question
put and agreed to.
Schedule 2
accordingly agreed to.
Clause 23
ordered to stand part of the Bill.
Clause
24Power
to cancel a
BRS
Dan
Rogerson: I beg to move amendment 20, in
clause 24, page 15, line 20, at
end insert ‘, and where it does so
it— (i) must direct the
levying authority to refund the sums received by it in respect of the
BRS or, where the levying authority is not a billing authority, direct
it to return to a billing authority that is a lower-tier authority in
relation to sums transferred to it by the billing
authority, (ii) must direct a
billing authority that is a lower-tier authority in relation to the
levying authority to refund the sums collected by it in respect of the
BRS but not transferred to the levying authority,
and (iii) must direct a
functional body to transfer to the levying authority sums received by
the body in respect of the BRS but not used by it,
and’.
The
Chairman: With this it will be convenient to discuss
amendment 21, in
clause 24, page 15, line 21, leave
out paragraphs (b) to
(d).
Dan
Rogerson: Much earlier today, reference was rightly made
to the elegance of the solution proposed by the right hon. Member for
Greenwich and Woolwich. I am sure the amendments that stand in my name
are not as elegant and perhaps do not do exactly what I intend them to.
However, I am grateful for the opportunity to have this debate and I am
sure the Minister will clarify what the intention is. I am very much
building on what the hon. Member for Northampton, South said about
reassuring people that if a project does not go ahead, the money will
be refunded.
I have been
looking at my own amendment, wondering whether it is actually about
money going back to the bill payers; it is certainly about money going
back to the billing authority and that is the intention. Earlier, a
circumstance was described relating to an underspend on a project.
Previously, it was suggested that overspends are far more likely, but
there is the possibility of an
underspend, which everybody would welcome. In that event, there is an
opportunity for that money to be passed back to its source and for it
to be refunded to the bill payers. Similarly, my amendment refers to a
situation where the Secretary of State or the relevant authority in
Wales needs, for some reason, to intervene to cancel the imposition of
a BRS, the scheme does not go ahead, and the money has to be
refunded. 10.15
am There
is a provision in the Bill to allow that at present, but my amendment
would strengthen it to ensure that the money does go back. I am not
quite sure what would happen to the money if it was not returned. I
assume that there are restrictions on its being used for any other
purpose, so I suppose it would sit in an account. Whether interest on
that account could be used for other reasons is another question, but
the amendment aims to clarify and strengthen the principle that if, for
whatever reason, the scheme needs to be cancelled and the money is not
used for the purpose for which it was originally intended, it will find
its way back to those who paid it in the first
place.
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