Local Government (Transparency) (Descriptions of Information) (England) Order 2015
The Committee consisted of the following Members:
† Blomfield, Paul (Sheffield Central) (Lab)
† Djanogly, Mr Jonathan (Huntingdon) (Con)
Fitzpatrick, Jim (Poplar and Limehouse) (Lab)
Hamilton, Fabian (Leeds North East) (Lab)
† Heaton-Harris, Chris (Daventry) (Con)
† Hendry, Charles (Wealden) (Con)
† Hopkins, Kris (Parliamentary Under-Secretary of State for Communities and Local Government)
† Jones, Susan Elan (Clwyd South) (Lab)
† Lancaster, Mark (Lord Commissioner of Her Majesty's Treasury)
† Sawford, Andy (Corby) (Lab/Co-op)
† Sheerman, Mr Barry (Huddersfield) (Lab/Co-op)
Simpson, David (Upper Bann) (DUP)
† Simpson, Mr Keith (Broadland) (Con)
Stringer, Graham (Blackley and Broughton) (Lab)
† Sturdy, Julian (York Outer) (Con)
Tredinnick, David (Bosworth) (Con)
† Williams, Mr Mark (Ceredigion) (LD)
Anna Dickson, Committee Clerk
† attended the Committee
Tenth Delegated Legislation Committee
Wednesday 25 February 2015
[Mr Andrew Rosindell in the Chair]
Local Government (Transparency) (Descriptions of Information) (England) Order 2015
2.30 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Kris Hopkins): I beg to move,
That the Committee has considered the Local Government (Transparency) (Descriptions of Information) (England) Order 2015.
It is a pleasure to serve under your chairmanship, Mr Rosindell. The order, which was laid before the House in January, is about transparency and accountability in small authorities. I welcome my hon. Friends’ support in previous debates for local authority transparency. The order adds to the categories of information about which the Secretary of State may require authorities to publish information more frequently than annually.
On 17 December, under section 2 of the Local Government, Planning and Land Act 1980, the Secretary of State issued a code of recommended practice on the publication of information by small authorities. The transparency code for smaller authorities applies to bodies such as parish councils, internal drainage boards, charter trustees and port health authorities with an annual turnover not exceeding £25,000. The Government’s intention is to make it a legal requirement for small authorities to comply with the code. Compliance will include a requirement to publish certain information relating to all formal meetings.
The Secretary of State may require authorities to publish information more frequently than once a year only if it falls within a description of the information in which section 3(4) of the 1980 Act applies. In short, legislation needs to set out which categories of the information the Secretary may require to be published more frequently than annually. As such, the order adds to the descriptions information relating to the meetings of a relevant authority, including the agendas, minutes and any other information concerning matters discussed at meetings. That will enable us to require the publication of meeting papers, agendas and minutes more frequently than once annually.
The Local Audit and Accountability Act 2014 introduces a local audit framework for public bodies under which small authorities with an annual turnover not exceeding £25,000 will no longer be subject to routine external audit on an automatic annual basis, although they will still have an auditor nominated to field any complaints from local electors. That is a far more proportionate approach to the country’s smallest public bodies and the amount of public money that they handle. In place of the external audit, such authorities will be subject to the requirements set out in the transparency code for smaller authorities. Because, under the new regime, the
requirements of the code will represent a substitute for external audit, the Government believe that requiring compliance through regulation is necessary. We will therefore ensure that accountability is maintained and that the ability of local taxpayers to see how their hard-earned money is spent and their services delivered will increase.Central to local people holding their local authority to account is having timely access to information about how the authority spent its money and about the goods and services that it buys and provides. Clearly, a once-yearly publication of minutes and papers would limit proper local accountability. Local people would become aware of decisions only a long time after they had made and after the opportunity to participate or influence the process had passed. The publication of a meeting’s agenda and papers will be required three days in advance of the meeting, and publication of its minutes no later than one month after the meeting. That will give the local electorate a clear picture of the activities that bodies have engaged in, and will enable local people to participate properly in the local democratic process.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op): We had a meeting recently about the good Bill that Chris White promoted, which became the Public Services (Social Value) Act 2012. Will the order help people who are tendering to find out information so that they can tender better? Is it of any value at all to that Act?
Kris Hopkins: The order applies to very small local authorities. If they put a tender out for work, it obviously involves a small amount of money. The hon. Gentleman is right: there may be a particular activity in an area that has been commissioned by a parish council, for example; people could see that item on the agenda, participate in the process as a member of the public or an interested body, and clearly see the outcome. More to the point, they could see that the decision was going to be made and the outcome on a monthly basis, or whatever frequency was appropriate for those particular meetings.
Mr Sheerman: I have in Huddersfield a couple of parish councils. The measure will give them an opportunity, if they are putting something out to tender, to use the 2012 Act to get a contract. My local authority in Kirklees is cutting everything to the bone because of the cuts—absolutely the statutory minimum and that is it. Before I vote on the order, I want to know whether it will stop parish councils from doing things.
Kris Hopkins: This is about giving the public access to information, not about placing a burden on district councils or not enabling them to carry out their functions. The order is about a small amount of money—less than £25,000—that is raised by local authorities. It will enable them to ensure that the public are aware what decisions will be made at a public meeting, and it will enable the public, within a month of that meeting, to see the determination.
Kris Hopkins: I am sure that it is absolutely relevant to the order as opposed to—[ Interruption. ] I have not given way yet, but I will let the hon. Gentleman intervene.
Mr Sheerman: The Minister and I have known each other for a long time, since he was the leader of Bradford Council after Eric Pickles but with some gaps in between. I was Chair of a Select Committee for 10 years, and what Ministers said in front of my Select Committee, which was just a tiny little thing at the time they said it, ended up being really costly. When they were delivering those tiny ideas costing a little bit of money, when those ideas got down to local councils, they cost a lot of money, time, and man and womanpower. The Minister knows that. As the elected Member for Huddersfield, I am just making the point that we need to be cautious of all these little regulations.
Kris Hopkins: I say respectfully to the hon. Gentleman that he has obviously not read the legislation because I fail to see how the publishing of the agenda and the minute of a meeting within one month would somehow impair the delivery of public services.
Mr Sheerman: I am very cautious, Kris.
The Chair: Order. The hon. Member for Huddersfield knows that he is not permitted to refer to the name of an hon. Member.
Mr Sheerman: That wasn’t on the record.
The Chair: The hon. Gentleman referred earlier to the right hon. Member for Brentwood and Ongar (Mr Pickles) by name.
Mr Sheerman: I am sorry, may I explain? I just called my old friend Kris by his name. He is the Minister. It was not meant to be on the record. I have known him as Kris for 20 years.
The Chair: Order. We will carry on with the debate. I was pointing out that Members should refer to “the hon. Member for”. The hon. Gentleman should know that.
Kris Hopkins: Thank you, Mr Rosindell. Local agencies and people want the publication of key financial and governance data to be mandatory. That was clear from the broad support shown in the consultation process for the Government’s intention to increase transparency: in answer to questions on that, some 76% and 88% of respondents explicitly supported our proposals. We are keen to support authorities to meet the code’s requirements, and we intend to deliver a programme of funding through the sector to assist those bodies in getting online and publishing information. That programme is being developed with the sector.
It is extremely important to deliver the code, which brings to a conclusion the changes we have made to the audit process. Although the order may apply only to
small parish councils with a turnover of less than £25,000, there are some 5,200 such councils and another 100 or so smaller bodies, so a significant number of people will be affected by the provisions. We want to get this right and make sure that we have complete transparency, so that the public have the opportunity to see where their money is being spent. We have, I hope, listened to the messages from the sector, and I commend the order to the Committee.2.41 pm
Andy Sawford (Corby) (Lab/Co-op): It is a pleasure to serve under your chairmanship, Mr Rosindell.
As the Minister knows is my practice before a statutory instrument Committee, I have consulted local government organisations and other interested bodies to hear their views on both the principle and the detail of the measure, and I can tell him that there is broad support for it. I took particular note of the views of the National Association of Local Councils. In the debates on the Bill that became the Local Audit and Accountability Act 2014, we rehearsed the arguments about proportionality and the differences between the capacity and the nature of small town and parish councils, district and upper-tier local government, and I think that today the Minister has shown that he understands and is proceeding in the spirit of proportionality, but I do have some questions for him.
There is the potential to add burdens to town and parish councils, as my hon. Friend the Member for Huddersfield mentioned. The Minister gave some assurances, and although I have heard the concerns well articulated by my hon. Friend, with all his experience in this House, after my conversations with NALC, for example, I tend toward the Minister’s view that the order is proportionate. I was none the less pleased to hear the Minister acknowledge that there is particular issue for local authorities that may not have a website. The way forward is not, I think, to enshrine in law their right not to engage with the worldwide web, but rather it is to support them to get online, because in the future it will be a reasonable expectation on the part of local citizens in any town or parish that, whatever the size of the local authority, it has some web presence and it is possible to engage with the activity of that council by looking online at its agendas and minutes and other relevant papers.
I agree that there are pieces of information the publication of which more than once a year would be in the local public interest, and we support the Government in that respect, but regarding the requirement to publish information on expenditures of over £100, will the Minister say why he settled on that figure, given that the figure for district councils is £250? I can understand that a lower threshold may be appropriate, as transactions undertaken by town and parish councils are generally smaller, but will he explain the figure chosen and whether, given the matter of burdens rightly highlighted by my hon. Friend the Member for Huddersfield, consideration was given to settling the threshold at £250, to reduce the number of individual transactions that have to be recorded and publicised in this way?
I would like to use this opportunity to highlight two issues that I think are pertinent to the order, but that are ongoing. The Minister will know that I have raised
before the question of councils’ ability to send agendas electronically. They tell me that in law they are required to send agendas to their members in paper copy. Many of them would much rather circulate agendas via e-mail. In this place, there is increasing use of e-mail to circulate papers relevant to the business of the House, and it is common practice in upper-tier authorities, but there are restrictions in law, of which the Minister will be aware, on the first tier of local government, where the speed, efficiency and cost reduction of being able to send agendas electronically would be particularly welcome. It seems to me that this SI could well have been a vehicle for that. Did the Minister consider that? If not, could further measures be brought forward within this Parliament? I have tabled four parliamentary questions on this issue and have had very favourable responses. The Minister’s predecessor personally assured me at a large meeting of town and parish councils that the Government would try to act, so I wonder why they have not been able to take this opportunity.A related matter, which I can see may have been more difficult to bring within the scope of this SI, is electronic payments. Did the Minister look at that? Local authorities are particularly keen to be able to make online payments, but they say—it is certainly NALC’s position—that they are restricted from doing that. It seems a nonsense in this day and age, when there has been a real revolution in how we use the internet to make payments, to effectively bar our town and parish councils from doing that. We should change the law in that respect.
Notwithstanding those areas where I would like to see the Government go further, we support the principles of transparency of accountability. The first tier does a brilliant job. I know that the Minister has a range of different communities in his area, as I do in mine, including smaller urban and rural communities. Some fantastic town and parish councils in my area have had some great initiatives in recent years, and I have been privileged to be involved in those and try to support them. The challenge for the first tier is to ensure that it is open and inclusive in its work and that it engages the public. That will be one way to ensure that as many town and parish councillors as possible are elected democratically—that is a big challenge for the sector in terms of its legitimacy in areas of the country where elections are not contested. If we shine a light with these simple steps towards greater transparency, it could help to enliven local democracy and encourage more people to get involved in the work of their town and parish council or perhaps even stand for public office.
2.47 pm
Charles Hendry (Wealden) (Con): It is a great pleasure to serve under your chairmanship, Mr Rosindell, although it is potentially for the last time.
I am grateful to my hon. Friend the Minister for setting out the provisions of the order with clarity. He seems to be taking an eminently sensible approach. He said in the course of his remarks that clear information is an important part of enabling local people to hold their councils to account. I completely agree with that, but the other aspect that has not been addressed fully is the process by which local people can hold councils to account. In the same spirit as the Opposition
spokesman, I would be grateful to know if the Minister looked at how that could be rectified when considering this SI.I have tremendous town councils and parish councils in my area, but people feel aggrieved about how they can complain if they are upset about something that the parish council has done, because parish councils are exempt from being looked at by the local government ombudsman. If people have a complaint, they are told to take it to the local district council or borough council, but all those councils can do is see whether the parish council has acted properly; they cannot look into the substance of the issue.
Because caps on increases in council tax do not apply, we have recently seen town and parish councils put through some substantial increases in council tax, with apparently very little opportunity for people in the community to express their concerns. In one example drawn to my attention recently, there has been an increase of more than 25% in the precept in the course of the past couple of years. The Minister is determined to ensure that there is clarity of information and an ability to hold these organisations to account, but how much further can he go in ensuring that genuine mechanisms are available to people to do so? Simply turning up and speaking in the public question time period of the council meeting does not seem to do that adequately.
We are told by the Department that, of course, local people have the right to vote town and parish councils out. That may have some power in February 2015 when the elections are in May 2015, but it will not seem a very strong power in June 2015, when the next set of elections are not for three years and 11 months. I welcome the steps that have been taken, but I think that more could be done to complete the circle.
2.50 pm
Tessa Munt (Wells) (LD): I wonder if the Minister might answer a small question about paragraph 7.8 of the explanatory memorandum, which states that
“the Code and the…underpinning Regulations will require the following information to be published online, annually, by no later than 1 July each year”.
I question two of the following items. First, does
“items of expenditure above £100”
include cumulative payments to the same person or body totalling more than £100, or does it relate only to individual payments?
Secondly, with end of year accounts and so on, there is a requirement to publish
“an explanation of any significant variances”,
and significant is defined as more than 10% to 15%. Therefore, with a budget of just under £25,000, only variances of between £2,500 and £3,750 might be considered significant, according to that wording. I suggest that in smaller authorities, a variance of that size—indeed, of any size—needs to be explained. I cannot see why one would not ask for public money to be accounted for thoroughly and properly.
2.51 pm
Mr Sheerman: I wonder whether the Minister had any correspondence or conversation about this with the Cabinet Office. Perhaps as an Opposition Member I should
not say this, but the Cabinet Office has done some very good work on improving communications in our modern democracy. Was there any conversation not only about the measures before us, but about using social media? I am very active in crowdfunding and crowdsourcing, using the strength of the community to gather money to do things that parish council cannot always afford to do. Has the Minister talked with the Cabinet Office about the potential to do that? I recently took a group of crowdfunders to meet the Secretary of State to discuss how crowdfunding could step in to look after projects that local authorities could no longer afford. Does he have any comment to make on that?2.52 pm
Kris Hopkins: A piece of legislation that appears to be very simple has prompted some interesting questions from Members, and I shall attempt to work my way through them, starting with those asked by my dear friend the hon. Member for Huddersfield.
Conversations have been going on with the Cabinet Office on how we improve communications and make government far more efficient, and those will continue. The hon. Gentleman is right about councils, public bodies and community groups exploring all sorts of ways to secure money, because public money is not as available as it was. People who have an interest will go out and provide backing. I know he is interested in schools and skills. Where common ground can be found with a group or business, there is an opportunity to explore that, and there is no reason why small bodies should not do with the same.
The Opposition spokesman, the hon. Member for Corby, made some important points on potential burdens on local authorities. We are engaged in a sensible conversation with sector bodies on how we can make sure that money goes directly through to parish councils that perhaps do not currently have the facilities to meet the requirements of the order, such as having a website or identifying a nominated auditor with which the public can engage. That addresses one of the points my hon. Friend the Member for Wealden made: if a member of the public is concerned about the activities of even with the transparency the order brings, they will have an opportunity to go through a nominated auditor. Conversations are ongoing on funding for websites, physically putting together and displaying the information, and access to an auditor; we hope to conclude them in early March so that, when the process starts fully, people will know how they will pay for it and we will have some clarity about some of the up-front costs and the long-term commitments that will be required.
I applaud the work undertaken by the sector and that tier of local government. Among my first meetings when I started in local government were meetings with my parish councils. A district councillor can feel far more connected than an MP does sometimes, but the
parish councillor’s literally street-to-street relationship with the electorate is far more acute and more relevant, I think. We should applaud the work that goes on there. Whether it is about fighting for a 20 mph sign or something else, it is about a sense of community and a real link into the democratic process, and then being confident about challenging district councils and MPs. That is important, and NALC certainly plays a role in facilitating that.I discussed the £100 threshold with the sector and it was thought to be a proportionate figure. It is right that it is a smaller amount. It is not the great sums that a district, county or metropolitan council deals with, but to the electorate paying over their money, £100 is a significant amount and we thought it a reasonable and proportionate threshold. We are still trying to reach a conclusion on electronic agendas. I hope that before Parliament rises, we can achieve the outcomes that both the hon. Member for Corby and I want. Debate is ongoing on electronic payments and how we can facilitate those.
Turning the questions asked by my hon. Friend the Member for Wealden, apart from having a nominated auditor, if publication of this information is mandatory, freedom of information requirements will be far less costly for parish councils. The public can be more confident about what money has been secured from taxpayers and how it has been spent. I have asked people to explore how the role of the ombudsman might play out. It is important that we have that conversation about what role an ombudsman could play and what costs could be associated with that.
On the very pertinent question about individual payments, I will write to the hon. Member for Wells. It is important to have clarity about whether cumulative payments to an individual totalling more than £100 are covered. I shall speak to the legal team about what the right thing to do is. As for variations around viring of moneys as a consequence of people making choices about what the budget was and where it is going to go now, the fact that, month-by-month or meeting-by-meeting, decisions will be laid out in front of the public, will let them see a path and give them the opportunity to participate, so I think the 15% to 20% provision is quite reasonable. My experience of parish councils is that people go into it for the right reasons: they are trying to drive good-quality public services at local level. The public will hold them to account and will want to know if there was any variance from the original budget; the fact that the information will be in the public domain will give them the opportunity to challenge those individuals. I repeat that we should welcome the work undertaken by parish councils and small bodies and the support they give our communities.