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"an organisation...whose activities are carried on otherwise than for profit, or for the benefit of the community on the basis that any profits are reinvested in the business of the organisation for the benefit of the community."
That covers a wide range of third sector organisations, charities, voluntary and community groups and social enterprises alike. Taking those provisions together, the amendment would ensure that specific consideration was given to those specific groups. The hon. Member for Christchurch (Mr. Chope) seemed sympathetic to the amendment, and I trust that he will support it.
Amendments 8 and 9 would simply serve to limit the scope of the scrutiny regime, rendering it less effective and less able to scrutinise matters of local concern. I am a little surprised that the hon. Gentleman has spoken to those amendments on behalf of the hon. Member for Putney (Justine Greening), because they are very inconsistent with the position that the hon. Lady adopted on Second Reading.
The hon. Gentleman was not at that debate and will not be aware of what the hon. Lady said, so I shall remind him. She appreciated the Bill's intentions to give councils
"much greater powers to scrutinise local public services,"
"a growing recognition that overview and scrutiny committees need to have powers over a wider range of external organisations as they become more involved in local public services".-[ Official Report, 5 February 2010; Vol. 505, c. 524.]
That view is supported by the Local Government Association, which has noted that
"much public spending...is in the hands of agencies with little or no democratic accountability."
"pleased that this Bill proposes to strengthen the powers of scrutiny available to councils".
So, far from imposing unwanted obligations on councils, as the hon. Gentleman implied early in his speech, the Bill responds to councils' aspiration for a more coherent framework in which to scrutinise local services. I find it curious therefore that he seeks to adopt a contrary position to that which his hon. Friend took on Second Reading just a few weeks ago.
Amendment 10 is otiose. It is simply unnecessary and would add nothing to the Bill. Amendment 6 is also unnecessary. The hon. Gentleman admitted that he had not discussed it with the hon. Lady, but had he done so and looked into it, he would have discovered that a "designated authority or person" is simply an authority or person designated by regulations made by the Secretary of State. Requiring the Secretary of State to revisit that
designation every year would therefore have absolutely no purpose, and I hope that the hon. Gentleman will accept that the amendment is unnecessary.
However, I am sure that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Stevenage (Barbara Follett), will be able to reassure us that, as a matter of course, the Government will keep under review the list of designated authorities or persons alongside that of the operation of the enhanced scrutiny regime itself. I think that the amendment's objective was to ensure a periodic review of the scope of the regulations and the organisations covered, and I am wholly sympathetic to that, so I hope that my hon. Friend the Minister will be able to provide such reassurance.
Amendments 14, 16, 20 and 26 to 28 seek to subject to the affirmative procedure all regulations made under the Bill. The key issue in the operation of the regime is the designation of the bodies that will be subject to it, and that is what determines the scope of the new powers. I recognise that that power can be said to have special importance, and that is why, under the Bill, it is subject to the affirmative procedure. That approach was adopted to provide hon. Members with appropriate, ample opportunity to scrutinise and debate any designation prior to regulations being made.
I do not, however, agree that the supporting regulations for the regime merit the same requirements. Those regulations will deal with some of the detail and technical matters relating to the operation of the regime, but there is no reason why they should be subject to a procedure that, as all Members know, is reserved for the most significant delegated powers, such as those creating new criminal offences. Furthermore, regulations will be made following consultation, and in Committee the Minister undertook that such consultation will take place. So, there will be an opportunity for people outside the House to have their say before regulations on those issues are drafted, and hon. Members will obviously be able to have their say as well.
The negative procedure provides hon. Members with the opportunity to secure a debate if they are so minded; I remind the House that Members have not sought such an opportunity to debate similar supporting regulations, on proportionality and the operation of the scrutiny regime covering local area agreement partners, that were introduced by the Local Government and Public Involvement in Health Act 2007. It would seem inconsistent to seek the affirmative resolution in respect of the supporting regulations in the Bill.
Amendments 17 and 22 would undermine the Bill's objectives; they would make it easy for any designated body or person to argue that their resource base was insufficient to comply with the requirements of the scrutiny regime. Like the previous amendments, they are also inconsistent with the view taken by the hon. Member for Putney on Second Reading. I quote her comments once again:
"Overview and scrutiny committees perform an important function, reviewing policy and performance and holding local public service providers to account. Currently, those committees have the power to require information from a range of organisations including councils, NHS bodies, law and order bodies and partner authorities that are involved in local area agreements. The committees can also summon representatives of most of those bodies to appear before them, and they can require such officials to respond to reports and recommendations that have been issued to them.
However, that does not happen with all bodies-for example, partners that are involved in delivering local area agreement objectives. Indeed, many other local bodies are not required to submit to the same level of scrutiny by local authorities, so their voluntary participation in scrutiny is not guaranteed."-[ Official Report, 5 February 2010; Vol. 505, c. 524.]
The hon. Lady supported the Bill on Second Reading because it was creating a more coherent framework for scrutiny, and one without the holes that exist in the current situation. Unfortunately, the amendment would create another very large hole because it would allow any organisation-even the largest and most wealthy-to claim that it simply did not have the resources to attend a scrutiny hearing. I hope that the hon. Member for Christchurch will give further thought to that.
Amendment 18 would add nothing to the current draft, which would see any description of persons in regulations by reference to their role.
Given that existing scrutiny regimes provide for responses to scrutiny reports and recommendations within two months, amendment 21 would complicate the scrutiny landscape, leading to confusion in respect of not only scrutiny committees, but bodies subject to scrutiny in all its forms. Under some powers they would be required to respond in three months, but under others they would have to respond within two. That does not seem at all helpful. The two-month time frame for responses is already in place, under the Local Government Act 2000 and the Local Authorities (Overview and Scrutiny Committees) (England) Regulations 2009.
Contrary to the concerns expressed in Committee about proportionality and the potential burden of the scrutiny regime, amendment 23-and I suspect that the hon. Member for Christchurch is not aware of this-would increase potential burdens on other bodies. The hon. Gentleman was having a little difficulty at that particular point in his speech, and I suspect that he had not grasped that amendment 23 would allow a series of different district councils in county areas to have simultaneous scrutiny of the same organisation. Clearly, that would impose an unreasonable burden.
The purpose of the provisions in the Bill is to ensure that there is a proportionality and that within county areas where there are district councils as well as the county council, there should be a joint approach rather than separate scrutiny powers being available to all the separate bodies.
Mr. Burns: Perhaps the right hon. Gentleman will be able to answer my question; I genuinely do not know the answer. In such circumstances, what would happen in a county where there was a borough council rather than a district council?
Mr. Raynsford: The hon. Gentleman raised that issue in an intervention on the hon. Member for Christchurch. I am happy to give the reassurance that I think they were working their way towards during their exchange. The formal designation relates to a district council and therefore the concept of a borough council has no impact at all.
The purpose of the provisions is to avoid unreasonable regulatory burdens that would result from different bodies scrutinising separately. I hope that the hon. Member for Christchurch will recognise that his amendment
would open up the scope for extra regulatory burdens on business and voluntary organisations, and will not press the amendment.
I listened carefully to the hon. Gentleman's comments, and I consider the amendments other than amendment 1 to be unnecessary. I hope that he will now agree not to press them, and to support my amendment 1, with which he seemed to have a great deal of sympathy.
2.15 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Barbara Follett): I will be as brief as possible. First, the Government wholeheartedly support amendment 1, tabled by my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford), which addresses concerns raised in Committee about the potential impact of the enhanced scrutiny regime on small businesses and voluntary or community interest organisations. I urge hon. Members to support it as well. I am happy to give my right hon. Friend the commitment that he sought by confirming that the Government intend to keep under review the list of designated authorities or persons throughout the continuing operation of the enhanced regime.
I agree with my right hon. Friend that the other amendments, tabled by the hon. Member for Putney (Justine Greening), are entirely unnecessary and would in fact hamper the effective operation of the enhanced scrutiny regime. On amendments 14, 16, 20 and 26 to 28, I gave a commitment in Committee that the Government would consult widely before making any regulations under the provisions of the Bill. I repeat that commitment today, and I hope that that will satisfy the concerns.
On the hon. Lady's amendments 23 and 24, we have yet to make regulations to allow for the establishment of joint overview and scrutiny committees involving a county council and one or more district councils. As my right hon. Friend the Member for Greenwich and Woolwich said, in this case that includes borough councils. The power to make such regulations was originally included in the Local Government and Public Involvement in Health Act 2007, and following consultation we strengthened it in the Local Democracy, Economic Development and Construction Act 2009. We recognise the importance of those regulations and see them as a high priority for the next Parliament, so that we can ensure that district and borough councils have a full role in the enhanced scrutiny regime being established in the Bill.
In closing, I echo my right hon. Friend's comments by saying that I hope the Opposition amendments will be withdrawn. They are entirely unnecessary and in fact detrimental to the local government scrutiny regime that the Bill establishes.
Mr. Chope:
It is a pleasure to wind up the debate. I thank the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) for having resorted to what is rather an old-fashioned practice in the House of actually responding to the points put forward in the debate. The Government, whom he supports, are a less powerful body as a result of his not being a member. Although I do not agree with the Government, he knows this subject and a lot of others well, and he has always treated us with respect and listened to the arguments that are put, over however short a period they have been developed. Unfortunately
I have not had a hotline to my hon. Friend the Member for Putney (Justine Greening) to be able to take her further instructions on his points.
I am not sure that I go along with the right hon. Gentleman's argument about the case against the affirmative resolution procedure. The mere fact that the negative procedure has not been utilised does not, I submit, mean that it is not appropriate to have the safeguard of the affirmative procedure.
I take the right hon. Gentleman's point about the complexity of having a whole series of district councils scrutinising one body, but there are situations such as that in Dorset, where each individual district council has a different take on the performance of the fire and rescue service as it operates in its own area. Last night, my hon. Friend the Member for Windsor (Adam Afriyie) introduced an interesting debate on sustainable communities and the operation of the fire service in Windsor. I am not sure that the complexity of the situation would be resolved if the House failed to accept the amendment tabled by my hon. Friend the Member for Putney. Ultimately, one would hope that if the district and county co-operate, with a combined scrutiny committee, they can decide for themselves which issues to raise. The fire authority could be brought before the scrutiny committee if Christchurch borough council were concerned about its activities. It would not be easy for the council to rely solely on a scrutiny committee comprised of members of other district councils and the county council.
That, however, is a debate that we can hold at much greater length on another occasion. The answer is to reduce the overlap between these different bodies, and I would certainly like to see directly elected police authorities, which would be a much better arrangement. I would also like to see-this is my personal view-directly elected and accountable fire authorities. That is probably a better way forward than introducing a complex system of joint scrutiny. The amendment tabled by my hon. Friend the Member for Putney accepts in a sense that that is the situation-we do not have directly elected fire authorities, police authorities, and a whole lot of other quangos involved in local government, which is why the solution is complex.
I look forward to a further discussion with my hon. Friend on the subject. It would be churlish, as I, like the Minister, support amendment 1, not to seek leave to withdraw amendment 8, and urge the House to accept amendment 1.
Amendment, by leave, withdrawn.
Amendment made: 1, page 2, line 3, at end insert-
'( ) Before making any regulations under this section the Secretary of State must consider their potential effect on small businesses and voluntary or community interest organisations.
"small business" means a business that employs fewer than 50 employees;
"voluntary or community interest organisation" means an organisation (other than a local authority or other public body) whose activities are carried on-
(a) otherwise than for profit, or
(b) for the benefit of the community on the basis that any profits are reinvested in the business of the organisation or applied for the benefit of the community.'.- (Mr. Raynsford.)
Mr. Chope: I beg to move amendment 25, page 5, line 18, leave out Clause 8.
Madam Deputy Speaker: With this we may consider amendment 2, page 5, leave out lines 26 to 30 and insert-
'(a) allow an overview and scrutiny committee of a local authority (or a sub-committee of such a committee) to co-opt members of the authority's executive as non-voting members of the committee (or sub-committee) for the purpose of considering a particular matter that does not involve it exercising functions in relation to the executive; and'.
Mr. Chope: Amendment 2 was tabled by the right hon. Member for Greenwich and Woolwich (Mr. Raynsford). Although it is an improvement on the existing wording of clause 8, the solution to the problem is better resolved by the proposal of my hon. Friend the Member for Putney (Justine Greening) to remove clause 8 in its entirety.
The clause deals with the membership of overview and scrutiny committees, and it seeks to amend section 21 of the Local Government Act 2000 by adding a regulation-making power that would enable the Secretary of State to make regulations to
"allow an overview and scrutiny committee of a local authority, or a sub-committee of such a committee, to include members of the authority's executive when the committee (or, as the case may be, sub-committee) is not exercising functions in relation to the executive; and...make such provision as appears to the Secretary of State about any conflict of interest arising."
The key to the problem is in the final phrase,
"any conflict of interest arising."
Either we effectively go for separation of powers and have an overview and scrutiny committee for a local authority executive, or we have the old-fashioned system, which I prefer, of committees, so that all members of the local authority have the same status in holding one another to account-although obviously, some will run the council or be the leader or chairman of a committee.
I am not sure that the overview and scrutiny process is the right solution, but I would not wish to be prescriptive. Rather, I would like less prescription, and to allow more local authorities to revert to the old committee structure if that is what they want to do. However, if we are going to have overview and scrutiny committees, it would be wrong to allow the executive to take places on them, certainly if they had voting powers, as envisaged in clause 8.
Mr. Raynsford: It might help the hon. Gentleman if I tell him that that is exactly the effect that amendment 2 would have-to prevent the executive members having a place by right on the committees. It would allow executive members to be invited in a co-opted role to the scrutiny committee when the committee believes that their expertise might be useful in relation to some outside matter, but not in relation to scrutiny of the authority or its executive. I hope the hon. Gentleman agrees that amendment 2 would achieve the objective he wants.
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