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House of Commons

Friday 5 February 2010

The House met at half-past Nine o'clock

Prayers

The Chairman of Ways and Means took the Chair as Deputy Speaker (Standing Order No. 3).

Mr. David Chaytor (Bury, North) (Lab): I beg to move, That the House sit in private.

Question put forthwith (Standing Order. No. 163).

Question negatived.

Bill Presented

Terrorist Asset-Freezing (Temporary Provisions) Bill

Presentation and First Reading (Standing Order No. 57)

Mr. Chancellor of the Exchequer, supported by the Prime Minister, Secretary David Miliband, Mr. Secretary Straw, Secretary Alan Johnson, Mr. Secretary Denham, Mr. Liam Byrne, Mr. Stephen Timms, Ian Pearson and Sarah McCarthy-Fry, presented a Bill to make provision for the temporary validity of certain Orders in Council imposing financial restrictions on, and in relation to, persons suspected of involvement in terrorist activity; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 62) with explanatory notes (Bill 62-EN).

Local Authorities (Overview and Scrutiny) Bill

Second Reading

9.34 am

Mr. David Chaytor (Bury, North) (Lab): I beg to move, That the Bill be now read a Second time.

My Bill will strengthen the scrutiny powers already available to local authorities, and extend the range of public service providers that can be subject to the scrutiny process. It is designed to improve accountability in order to improve outcomes and thereby drive up the standards of local public services.

I express my thanks to all those who have helped with the drafting and preparation of the Bill. I thank those local councillors and officials in both central and local government who have given me the benefit of their experience of the way in which scrutiny is working now. I thank all those people who have written to me about the Bill with very constructive suggestions, demonstrating the increasing interest of local authorities in the scrutiny process and the seriousness with which they take it. Hundreds of people from across the country have written letters or sent e-mails urging me to adopt their preferred Bill, and I hope that they will understand why it has not been possible for me to reply to them individually. I hope that they appreciate the reasons for my choice of Bill.


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I recognise the work of the Local Government Association in providing extremely valuable guidance on scrutiny processes and in submitting a detailed response to the Bill. I express my gratitude for the assistance provided by the Centre for Public Scrutiny, both in terms of the professional expertise and advice generously made available to me and the wealth of excellent material available on the centre's website. Finally, I commend the staff of the Library for their excellent research paper on the Bill.

Before coming to the Bill and the increase in powers that it proposes, I want to say a few words more generally about local democracy and the power and role of scrutiny. For much of the second half of the last century, local councils saw their powers to influence the growth, shape and future development of the communities that they serve gradually weakened. Many of the services that councils had traditionally provided directly were centralised or privatised. Councils became increasingly dependent on central Government for their financial base. They were subject to intense political and financial pressures, locally and nationally, as the demand for quality public services grew, but taxpayers' willingness to pay for them declined. As a result, the provision of services was gradually fragmented; the quality of many services declined; the lines of accountability and responsibility became confused; and the perception grew that the provider of the service was frequently more important than the consumer.

Not surprisingly, the electorate gradually also became confused as to who was responsible, and with that growing confusion about the lines of accountability came increasing dissatisfaction with the quality of service. Voters were unsure as to who was to blame when things went wrong, and they lost confidence in the capacity of the council to put things right. Of course, as we all recognise, that was gradually reflected in declining levels of interest and turnout at local elections.

The last 10 years have given all local authorities a much more secure financial base, a much clearer view of their role and the capacity to invest heavily to improve local services and infrastructure. Yet the levels of public engagement with local democracy and public support for local authorities are still frequently far too low. That is in spite of gradual improvements in performance, as evidenced by the inspection reports, and the gradual increase in the number of four-star councils that are now performing at a very high level.

There will always be differences between the main parties about the structure and financing of local government. However, the good news is that there is now a stronger, cross-party consensus about the need for greater accountability, greater transparency and more decentralisation of decision making than has existed for many years. That was evident in the debate on the local government finance settlement earlier this week. All the major parties now agree that if local democracy is to be revived, the direction of travel has to be towards further decentralisation, increasing localism and increasing personalisation of public services. There is also growing recognition of the importance of local public service providers working in partnership on common objectives. Isolation and fragmentation of the delivery of services is ineffective and highly expensive, which is where the scrutiny function of local authorities becomes of central importance.


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Today, people are used to accessing high-quality services from the private sector 24 hours a day, seven days a week. Expectations of high-quality services tailored to individual need, delivered at a time convenient for the service user, are rising continually. People also want more from the public sector-from central and local government. There is growing demand for more information on local services. I must refer to an enormously important development: the launch of the data.gov.uk website, which enables everyone in Britain to access a potentially infinite amount of information on all local public services. It is the beginning of a remarkable transformation in the availability of information to the public. There is also demand for greater consultation on how local services are provided, and for greater public involvement in the shape of those services. There are also demands for action and proper complaints systems when the public feel that things do not work properly.

As almost all public services are delivered locally, the efficiency and effectiveness of local government is crucial, and in recent years much has already been done to bring that about. The past decade has seen many improvements. We now have greater financial stability, with three-year financial settlements enabling local authorities to plan ahead in a more stable manner. There is a reduction in the number of central targets and inspection regimes, and associated greater flexibility locally. There is greater financial flexibility through a more prudential borrowing scheme, too.

Mr. Andrew Dismore (Hendon) (Lab): One of my concerns about my hon. Friend's Bill is that there is no provision that addresses the question, "quis custodiet ipsos custodes?" or "who will guard the guardians?" To take up his point about flexibility, my local authority has decided to axe the sheltered housing warden service. As a result of all the local opposition and the High Court decision, it is now revisiting the issue. There seems to be no way to hold the local authority to account. Is there any way, in his Bill, of holding the local authority to account in those circumstances?

Mr. Chaytor: My hon. Friend raises a very important point. In the Bill there is no such way, but through the ballot box there is. Another answer to his question is that increasing emphasis is being given to the power of the public to influence and pressurise local authorities, through the community call for action, the councils' call for action, and the new emphasis on petitions. All those were introduced in recent local government legislation. That, in addition to the normal power through the ballot box, gives the public more power to influence local authorities' decisions.

I want to draw attention to an important change in recent years: local authorities now have a general power of well-being, after calling for it for many years. They are no longer shackled by central Government restrictions on how they interpret the long-term needs of their areas. Of course, the role of councillors and councils, with their unique democratic mandate, is absolutely critical to making sure that local services respond to the needs of local communities, although I fully accept that, as my hon. Friend has mentioned, decisions by local authorities do not always reflect the needs of their communities.


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Councils must be given the powers that they need to act decisively and effectively on behalf of their citizens, and the powers and capacity to scrutinise, influence and shape all public services, including those delivered by other providers, which may be in the private sector or the third sector, or that may be agents of central Government. That is a new, much stronger role for local government, placing it firmly at the centre of decision making in the community. It is central to the long-term process of rebuilding public confidence in the democratic process overall.

I want to say a word about the role of scrutiny and how it has developed in recent years. Although the separation of local authorities' powers into executive and scrutiny functions has been in place for barely 10 years, enormous progress has been made in many local authorities, where the power of scrutiny is clearly understood. In some parts of the country, oversight and scrutiny panels have started to shape the local delivery of health and crime prevention policies. In the more successful authorities, the panels have already led to an increase in public engagement and a greater recognition by service providers of the need to respond to public concerns.

It would be naive to assume that every local authority has fully grasped the potential of the new scrutiny function, but I think that it is generally recognised that understanding is increasing, and the number of people calling for a return to the old system is dramatically reducing. Now is the time to move forward and ensure that scrutiny is an outward-looking process that considers the wider impact of how effectively public money is spent across all public services in a local area.

The growth of local strategic partnerships and the establishment of comprehensive area assessments mean that councils must now take responsibility for the effective use of public funds across their whole area, and they should be able to hold all public service providers to account on behalf of the communities that they represent. At a time of rising public aspirations and increased aversion to higher levels of taxation, councils and other public service providers need to find ways to deliver ever more personalised and flexible public services with the same level of resource. Effective scrutiny processes can help them to find ways of doing more with less.

Mr. Dismore: My hon. Friend has a very good Bill, and there are some important points raised by it. I have a question to ask him about designation, which will be done by the Secretary of State. I assume that it is not intended that Parliament, or Members of Parliament, should be among those who can be designated, because that could raise important issues relating to privilege.

Mr. Chaytor: My hon. Friend raises a really important point. From my point of view, the groups that he mentions will not be subject to the regulations that will be published. It is a matter for the Government which organisations and individuals they include, but in all the discussions about the Bill to which I have been party, there was no suggestion that Parliament should be designated in the regulations.

Matthew Taylor (Truro and St. Austell) (LD): On that point, I am never particularly in favour of giving Ministers all sorts of discretionary powers; one never knows who the Minister will be at any given time. I am not quite sure why the hon. Gentleman has taken the
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approach of handing over the designation of the bodies that will be scrutinised to Ministers, because the definition in the Bill could cover a very wide range of organisations that are in receipt of some sort of public funding, including charities and others; all sorts of such organisations deliver services in my constituency in that way. There might be concern about how widely the definition is drawn in practice.

Mr. Chaytor: That is an important point, and that concern has been raised by a number of organisations. However, given that the measure is a radical step forward in giving local authorities powers to scrutinise a wide range of organisations, there probably does need to be more time to build up consensus about the range of organisations included. The hon. Gentleman will recall that the Local Government and Public Involvement in Health Act 2007 lists, I think, 20 public agencies that can now be scrutinised as part of the local area agreement process. That list could well be specified in regulations under my Bill, but there are other agencies and providers that could be specified, too, not least the utility companies and public transport providers. Further debate is probably needed before the regulations are issued, rather than specifying in the Bill which bodies should be included.

Since the development of scrutiny in the Local Government Act 2000, enormous progress has been made. Initially, councils had to set up at least one scrutiny committee to examine decision making across the council, acting as a check and balance on the powerful council executives. Those committees had Select Committee-style powers, and were able to call in officers and members to give evidence. They could also require information to be given, but only in relation to council executive decisions.

Scrutiny committees were also provided with wide ranging powers to examine any issue of importance in a council's area and make recommendations to the council, but in such reviews the scrutiny committees did not enjoy the same Select Committee-style powers as they did when looking at executive decisions. The co-operation of external bodies in these circumstances was entirely voluntary, and frequently it was difficult to find that co-operation.

The Health and Social Care Act 2001 provided upper-tier local authorities with the power to review the planning, provision and operation of health services in the area and to make reports and recommendations to local NHS bodies. Scrutiny committees may require NHS bodies to provide information, attend scrutiny meetings, answer questions and respond to recommendations made by the scrutiny committee. Under the 2001 Act, NHS bodies must also consult the relevant local authority scrutiny committee about proposals for substantial service changes. If the committee is unhappy with the proposed changes, the issue can be referred up to the independent regulator.

A further step forward was made when the Police and Justice Act 2006 required every local authority to have a crime and disorder committee with powers to scrutinise decisions made or actions taken by the crime and disorder reduction partnership. As with the health scrutiny regime, crime and disorder scrutiny committees can require information, require officers to attend meetings to answer questions, and require a response to the recommendations that they make.


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The Local Government and Public Involvement in Health Act 2007 extended the Select Committee-style powers. The new arrangements have made scrutiny more outward-looking, and it can focus on the activities of public sector partners such as Jobcentre Plus, joint waste authorities and the Highways Agency in respect of agreed local priorities.

Mr. Dismore: Would my hon. Friend's Bill extend to railway contractors? I have in mind the appalling record of First Capital Connect on the Thameslink line, which has affected so many of my constituents since the dispute, and its failure to restore proper services. Would my local authority be able to call the company to account through the scrutiny process?

Mr. Chaytor: Again, my hon. Friend makes an important point. As he knows, that would be the subject of future regulations, but railway contractors as well as the train operating companies, other public transport services and other public transport maintenance companies that are wholly or partly financed by public funds could potentially be listed in the regulations. My hon. Friend's intervention reinforces the point that a further period of debate and discussion is probably needed about the individual organisations and providers that should be included in the future regulations.

The Local Democracy, Economic Development and Construction Act 2009 required local authorities for the first time to provide a dedicated scrutiny officer. That requirement should be in force by 1 April this year. Only this week, the Flood and Water Management Bill increased the powers of local authorities to scrutinise the various risk management authorities on the exercise of their flood and coastal erosion functions.

The Bill takes forward proposals in last year's local government Green Paper, "Strengthening local democracy," on which there was a substantial public consultation in the last few months of 2009. It extends councils' scrutiny powers to the next logical stage. It will enable scrutiny powers to cover a wide range of external bodies from the public and private sector. It will be a matter for future debate and for the Government as to which bodies are designated in the regulations. It will designate bodies that carry out activities which impact heavily on the day-to-day lives of local people.

The Bill enables more effective scrutiny of local public services. It does so by establishing a framework for broadening their scrutiny powers and extending them to cover a wider range of organisations. That means that in future, when undertaking their scrutiny function, councils will be less reliant on the voluntary co-operation of external organisations. Under the new regime the external bodies subject to scrutiny may be required by a local authority's overview and scrutiny committee to provide information to the committee and to attend scrutiny meetings to answer questions. Both measures will help council scrutiny committees to be fully and properly informed. The external bodies will be required to respond to the scrutiny committee's reports and to have regard to the recommendations.

The framework established by my Bill provides that bodies subject to the regime will be specified in future regulations, so decisions will be a matter for the Government, as has been mentioned, but the Bill enables the maximum reach and scope. I hope that the Government will be ambitious and imaginative in deciding which organisations will be specified in the regulations.


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