Both my hon. Friend and the hon. Member for Putney (Justine Greening) mentioned resources for scrutiny, and I endorse the view that the scrutiny function has to be properly resourced. That is clearly a difficult ask at a time when public funding is under considerable pressure, but it is a false economy to believe that we can cut back on that function, which is a very small part of total local authority budgets, and not have adverse consequences. The potential loss from less efficient scrutiny will be felt over time through less efficient services, as old and perhaps outmoded practices are allowed to continue longer than they should because they are not challenged, as the scope for making savings by doing things better is not identified and as the scope for different public authorities to work better together to make savings in public expenditure is not picked up. It would be a wholly false economy to cut back on scrutiny expenditure at the present time as a way of saving money, because it represents a very small proportion of total local government spending and it is important that the scrutiny function is handled well.
The context of Total Place, an important current initiative, makes that all the more important. Through it we are beginning to understand the scale of total public investment in individual areas. If there is good scrutiny in parallel with that, it will surely help to ensure that we indentify areas in which resources could be better used and those in which there is scope for savings. That seems to me a fertile area for good scrutiny in future.
I welcome the Bill, and there are only two elements of it that I have reservations about, which I shall highlight before I conclude. The first is the exclusion of district councils in two-tier areas. The Local Government Association has raised this issue. I can understand the argument about the need to avoid unnecessary duplication, but excluding district councils entirely is using a sledgehammer to crack a nut. Surely it would be better to have a protocol arrangement to ensure that there was no duplication. If a district council in a two-tier area intended to set up scrutiny of a wider range of other authorities, it should first be required to consult the county council and other district councils. There should also be an obligation to set up a joint scrutiny committee or to work in collaboration to avoid the problem of duplication. That seems to me a much better approach than simply debarring district councils from being involved in the scrutiny in question in two-tier areas.
Secondly, clause 8(3) raises a difficult constitutional issue. Proposed new section 21(9A)(a) of the Local Government Act 2000 would allow executive members to be members of scrutiny committees, provided that they were not scrutinising the executive itself. The hon. Member for Putney raised that concern. I believe that when she looks at the Hansard reference, she will see that she referred to the Centre for Policy Studies. I guess that her brief said "CPS"-I think she meant the Centre for Public Scrutiny.
I am grateful for her kind reference to it. It is concerned about the matter, as am I, because there is a slippery slope and an erosion of the principle of the separation of powers between scrutiny and executive. If that is damaged, it could have serious consequences for the integrity of the scrutiny function. It could well
also create a difficult relationship between executive members and people in outside bodies if the latter were talking to them as partners one day and subject to scrutiny by them the next. The partners themselves would not have the option of scrutinising the working of the executive. It is unfair to outside bodies that need to work in partnership with executive members of local authorities to be subject to scrutiny by them as well. For that reason, as well as that of the separation of powers, I do not believe that we should go down that route. I ask my hon. Friend the Member for Bury, North, and the Minister to have a further look at that.
My final observation is that we frequently hear from local government the complaint that back-bench members of local authorities, whose role is essentially scrutiny, are not accorded the same status and standing as executive members. Frankly, anything that we can do to boost the morale and status of back-bench and scrutiny members is good, and we certainly should not erode it by stating that executive members can sit on scrutiny committees as well. I hope that that will be reconsidered.
With those few reservations, I give my strong support to the Bill. It will help to take forward the process of scrutiny in local government and the search for more effective delivery of public services when a range of bodies are involved. I wish it every success and support its principles.
Matthew Taylor (Truro and St. Austell) (LD): First, I welcome the comments of the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) and endorse pretty much everything that he said. I will not repeat it, because he put it extremely effectively and has a great deal of knowledge in this area.
My broad position is that I very much welcome the Bill. It makes real some of the issues covered by Total Place, which the hon. Member for Bury, North (Mr. Chaytor) referred to. It seems to me that a core function of local council representatives is to raise issues of concern to their community. The scrutiny process is a very effective way of doing that, and the Bill will provide them with some real authority in that process. For those reasons, I wish it well and the Liberal Democrats will support it.
I have one issue to raise, which I have touched on, and it is one of principle. We are discussing scrutiny, and the role of the House is to scrutinise the Bill. The fundamental question is which bodies are to be scrutinised, and it does not specify that. We can examine the Government's consultation, which lists the type of organisations that it believes may be subject to scrutiny, but we have no confirmation that they will. Nor do we have any real idea of whether that is the final list or whether it is to be extended much further.
Even if the current Minister were to outline his intentions in relation to which bodies will be covered, a future Minister might come to a different view. The matter would have to come back to the House and be subject to debate, but we all know that the processes of resolution here are brief, that not many Members are involved and that generally speaking, whatever the Government want goes through. That is the reality of the process. It is a real shame that we have not been given that information for today's debate, and I hope
that it can be brought to us in Committee. When legislation is brought before the House, it helps when Ministers talk about what they believe will fall within its scope, because that gives direction on what might happen in future and arms any future colleagues-not me, but there might be others-who challenge exemptions in the regulations or elements that might be missing, by giving them a clear steer at this stage in the legislative process. The hon. Member for Bury, North has done a great job in bringing the Bill forward, but I hope that he will seek clarity from the Minister and the Department on that point, and that the Minister will give it-if not today, then in Committee.
I should also apologise, because I have a brief engagement that I have not been able to get out of, so I shall be escaping in a moment. I might not be here for the reply to this debate, but my hon. Friend the Member for Mid-Dorset and North Poole (Annette Brooke) will be. That is a discourtesy to the House, but I am afraid that it is not one that I can avoid.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Ian Austin): I congratulate my hon. Friend the Member for Bury, North (Mr. Chaytor) on his success in the ballot and on all the effort that he has put into bringing forward his proposals.
I also thank all the other Members who have taken part in this debate. My right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) is an acknowledged expert on the issue, as he is on so many other local government matters, and not just because of his distinguished ministerial career, but because of his career before he entered the House and his work with the Centre for Public Scrutiny, for example. I thank the hon. Members for Putney (Justine Greening) and for Truro and St. Austell (Matthew Taylor) for the constructive, detailed and expert analysis that they have brought to bear on the issue. I also thank the hon. Lady for her constructive and non-partisan tone in discussing the proposals.
I am pleased to confirm that the Government support the Local Authorities (Overview and Scrutiny) Bill, which my hon. Friend the Member for Bury, North has introduced. His proposals are in line with some of those set out by my right hon. Friend the Secretary of State for Communities and Local Government in the "Strengthening local democracy" consultation, published in July last year. The Bill provides the framework to extend the reach and influence of local authority scrutiny further. My hon. Friend set out what the Bill does in practical terms. I do not intend to repeat what he said, but I shall try to respond to some of the points made in the debate.
As my hon. Friend said, there is an increasing appetite for more localised and personalised services, greater transparency and more accountability. Consumers know more about the services that they want to be provided with. They expect greater responsiveness and higher quality, and they have every right to do so. My hon. Friend's proposals attempt to answer the increased demand for accountability, and ensure probity over the use of public resources and equity in access and opportunity.
Local government is a major route through which the voice and interests of local people, through their elected representatives, can be brought to bear on the national and local institutions that provide local services.
People expect their council to be at the heart of decision making in the area-the one place that they ought to be able to go for information on the full range of services provided, and the place to which they can look to influence decisions on how those services are delivered. When people vote, they should be confident that they are electing someone who will take a real interest in those issues locally and act on their behalf. The council's scrutiny function is one way of delivering that accountability locally.
The new powers will extend scrutiny to a wider range of bodies to address cross-cutting issues locally to best effect, and will provide local authorities with greater expertise and more information. In the first instance we intend to apply the new framework to existing local area agreement partner bodies. That will remove the current limitation on the scrutiny of activities related to LAA matters only, recognising that the local contribution and activities of partner bodies-such as Jobcentre Plus, and fire and rescue authorities, to name just two-cut across the full range of local issues that arise, and are not limited to the delivery of priority targets in the LAA. We also intend to extend scrutiny to two new sectors: energy and transport.
We recognise, as we did when scrutiny was first extended to cover LAA partners, that those who will become subject to scrutiny for the first time might have concerns about what that will mean for them in practice. They will want to know how much time it will take up, how much it will cost and whether they will be required to attend hundreds of scrutiny hearings across the country. We understand those concerns, and that is why we intend to use the regulation-making powers in the Bill to put in place safeguards and procedures to ensure that the exercise of the new powers by councils does not impose a disproportionate burden on bodies that are subject to scrutiny.
My experience as a councillor in Dudley in the 1990s left me with firm views on the vital role that well-informed, fully engaged councillors can play as champions of their community and the residents they serve. At their best, councillors are out and about in the communities that they represent; local, available and in touch; talking to local people; engaged with community groups and voluntary organisations; understanding in detail the services provided in their wards-truly in touch with local people. That is the sort of councillor that local communities need if greater scrutiny is to work effectively, because local scrutiny will be at its best when led by councillors who have their finger firmly on the local pulse and when driven by local people to examine the issues that matter to them. For those councillors sitting on scrutiny committees, the new powers are therefore significant.
However, with additional power comes greater responsibility, because scrutiny is not about confrontation or criticism for the sake of it, but about constructive debate and challenge where necessary. It is not about taking over all local services or being a substitute decision taker for external bodies, but about influencing the decision-making process and ensuring that decisions
are properly informed and properly taken. Scrutiny is about contributing positively to policy development across the full range of services, bringing partners from all sectors together to ensure that residents are getting the best deal. In recent years the council scrutiny function has taken on a higher profile, and is now used not just to increase openness and transparency, but to improve the services that residents receive. Councillors and scrutiny committees should engage with local people to ensure that scrutiny looks at the issues that matter and to select topics for review so as to ensure that they scrutinise the subjects that local people are concerned about.
The hon. Member for Putney raised issues of cost, as did all right hon. and hon. Members who spoke. Let me try to deal with some of those. An impact assessment has been prepared on the basis of local authorities continuing to work within their existing budgets and therefore continuing, as at present, to prioritise issues of local concern for scrutiny and review. We therefore do not consider part 1 of the Bill to have any major financial implications for local authorities. Any increased cost arising from part 1 will instead be limited to the additional compliance costs on external bodies undergoing scrutiny, in providing information to committees or attending meetings, for example. The Government estimate that the increased annual compliance costs could be up to £480,000 each year, with up to £427,000 falling on private sector bodies and up to £53,000 falling on public sector bodies.
The Bill also includes provision for scrutiny resources. Section 21ZA of the Local Government Act 2000 requires local authorities to designate one of their officers as scrutiny officer. That officer's functions are to promote the role of the authority's overview and scrutiny committee or committees; provide support to such committees; and provide guidance and support to members and officers of the authority, and members of the authority's executive, in relation to the functions of overview and scrutiny committees.
The Bill will require local authorities to provide their designated scrutiny officers with such staff, accommodation and other resources as they consider sufficient to discharge their functions. That mirrors the provision for monitoring officers in the Local Government and Housing Act 1989. The new requirement might result in additional costs for some authorities-costs that the Government estimate will amount to no more than £4.5 million each year. The Government are committed to ensuring that any new burden falling on local authorities is funded. The cost will therefore be fully and properly funded by the Government, so that no additional pressure is placed on council tax bills.
As I said earlier, my right hon. Friend the Secretary of State believes that the Bill takes forward key proposals of the "Strengthening local democracy" consultation and will provide a flexible framework to enable councillors to scrutinise a wider range of bodies and improve the services that residents receive.
I thank all right hon. and hon. Members for their contributions to this debate. When I spoke about the all-party consensus on the need for more decentralisation and localism, and more transparency and accountability, I could not have imagined that that
would be so perfectly reflected in the various contributions that have been made. Things have moved on significantly in recent years, in terms of the main parties' attitudes towards local government and their agreement on certain key principles.
The hon. Member for Truro and St. Austell (Matthew Taylor) was exercised by the issue of the list of new bodies and agencies not being included in the Bill. A large number of bodies and agencies were mentioned during the debate, and there would not necessarily be consensus at this stage that all of them should be included in the list of designated bodies. That provides the best case for leaving this matter to be set out in regulations. I accept fully, however, that that would place the matter completely in the hands of this Government or a future Government. I hope, therefore, that the Minister will take on board the suggestion by the hon. Member for Putney (Justine Greening) that a draft list be published in advance of the regulations. That would provide time for further debate and consultation, and for the building of consensus.
Matthew Taylor: Let me make it clear that I was not necessarily suggesting that the list should appear on the face of the Bill. I accept that consultation needs to take place and that the timing might not work in that regard. I also accept that such a list could be over-restrictive. I hope that the Minister will listen to what the hon. Gentleman has just said on this point. A draft list put out to consultation would allow proper scrutiny and a debate on what was appropriate.
The hon. Member for Putney made a number of detailed points. She called for further clarification and raised questions about definition, all of which were important and many of which can be discussed further in Committee. My right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) drew two important points to the attention of the House. He mentioned the potential conflict of interest involved in dismantling the separation of powers, and the implications for the role of executive members. Parliament is not in a position to insist on an absolute separation of powers in local government because we ourselves do not have, and have never had, an absolute separation of powers. There is a case, however, in specific instances involving certain subjects of inquiry, for allowing executive members to be members of the scrutiny panels.
Furthermore, many local authorities are now revising the original model of scrutiny panels, which involved one executive committee and any number of scrutiny panels. They are setting up special sub-committees, special working parties and special task and finish groups. The expertise of an executive member on a specific task and finish group, which bears no relationship to his executive functions, could prove to be extremely useful. I accept completely, however, that this matter needs to be explored further. The question of district councils in two-tier areas was raised. I believe that there
is ample scope for those smaller district councils to work co-operatively with their county councils and to set up joint structures of one kind or another.