Joint Committee on Draft Civil Contingencies Bill First Report

6 Resource Implications


209. This chapter examines the financial and manpower consequences of the draft Bill. The Government's main consideration of the effects on resources is set out at chapters 2 and 3 of the Consultation Document, in the two Partial Regulatory Impact Assessments published with the draft Bill[224] and in the explanatory note on the financial and public service manpower effects of the Bill.[225]

210. Since 1998 there has been a requirement that all Government policy proposals which affect business, charities or voluntary bodies must be subjected to a Regulatory Impact Assessment, which should identify the impact of policy options in terms of the costs, benefits and risks of the proposals[226] to, in this case, improve emergency resilience. The analyses of costs are critical in informing external consultees about the consequences for them of proposals, and hence are central to the policy making process.[227] As well as analysing the effects of the Government's proposals on the private sector, the guidance reminds officials "to consider the costs and benefits to ... local ... government", including the costs of complying with any requirements.[228]

211. The Cabinet Office published two Partial Regulatory Impact Assessments alongside the draft Bill. The first reviewed the effects of the local contingency planning provisions in Part 1; the second addressed issues arising from use of the emergency powers in Part 2.

Local contingency planning: costs to business, voluntary organisations and charities

212. In examining how to meet its policy objective - to create a modern framework for contingency planning and response - the Government identified three options when framing the provisions at Part 1 of the Bill:

213. The Government concluded that the first option would not meet the policy objective of establishing resilience systematically.[231] The third option, while it would meet the objective, would be at the cost "of new statutory burdens on a wider range of organisations, including a greater number of private businesses, charities and voluntary organisations … with associated costs".[232] The second option provides, in the Government's view, the middle way of achieving the policy, while the additional costs to Category 1 bodies (local authorities and public bodies) "will not be great" because the organisations subject to the new requirements in the draft Bill "are already engaged in this activity".[233]

214. The Partial Regulatory Impact Assessment provides an evaluation of the additional costs the second and third options would place on business, voluntary organisations and charities.

  • The additional costs arising from the second option are estimated at between £850,000 and £1,450,000[234] (rounded). The explanation for this modest estimate is that (under option 2) only a small number of organisations will have to meet the duty; those to which it applies will be placed in Category 2; the work required to meet the co-operator duty in Category 2 is not onerous (e.g. requests for information, attendance at meetings and infrequent, short exercises); and some businesses are already carrying out the work.[235]
  • The figures offered for option 3 are very tentative: double the costs for those organisations placed in Category 1 rather than Category 2; and around £5,650 - £6,250 (rounded) for organisations in Category 2.[236]
  • The Regulatory Impact Assessment did not attempt to quantify the difference in benefits between options 2 and 3.

215. The second option is embodied in the draft Bill.

216. Since the publication of the draft Bill, the businesses responding to the consultation exercise have expressed reservations about the Government's figures. United Utilities, who under the provisions at Part 1 of the Bill would be a Category 2 Responder, said that their expenditure on emergency planning responsibilities was already nearly double the amount quoted in the Regulatory Impact Assessment, even before allowing for any uplift in activity as a result of the Bill, and that the Assessment, although not an order of magnitude wrong, was two or three times too small.[237] BT - another Category 2 Responder - said it was not in a position to confirm that the appraisal of costs was adequate or accurate, as a robust assessment would rest on an understanding of features which were, at present, either vaguely defined or not defined at all. But BT did point out that the estimate of costs failed to consider overhead and operating expenditures, capital costs, and opportunity costs.[238] BT also said that the proposals could involve "moving down to a greater level of detail and it depends how that is managed and rolled out across the country". [239] British Energy - also a possible Category 2 Responder - was not clear how the costs of ongoing training, exercises and learning from real and exercise events or regulatory requirements would be accommodated within existing cost bases, or that they had been included in the assessment.[240] CE Electric UK - another possible Category 2 Responder - considered that the costs identified in the assessment had been grossly underestimated and that the burden imposed by the new statutory duties would depend on the degree of preparation already carried out by the local authority or other agency, which varied markedly from one to another.[241]

217. In our view, the debate about civil contingency planning can only be pursued effectively if the costs and benefits are addressed comprehensively. Although the Minister in charge of the Bill suggested that the Regulatory Impact Assessment showed that the burden on the private sector was small and that the benefits were potentially very large,[242] we found little to assist us in the Partial Regulatory Impact Assessment (Local Responders) as it had been prepared before the secondary legislation was ready, omitted costs and lacked evidence to support the figures quoted. We do not believe that the Partial Regulatory Impact Assessment provides a sound basis to inform policy decisions.

218. We therefore recommend that the Regulatory Impact Assessment (Local Responders) be redrafted in order to address the concerns voiced by business and to ensure that it meets the rigorous requirements of Better Policy Making: A Guide to Regulatory Impact Assessment. It needs to set out in much more detail, with supporting evidence, the costs and benefits of the options and to review the options comprehensively in the light of the regulations to Part 1, which are now due to published with the Bill.[243]

219. We deal below with the provision of additional resources for civil contingency planning for the private, voluntary and public sectors.

Local contingency planning: costs to local authorities

220. Neither the Partial Regulatory Impact Assessment (Local Responders) nor the Consultation Document and explanatory notes provide a detailed or systematic analysis of the costs to local authorities of implementing the proposals in the Bill. Instead, the Consultation Document lists recent initiatives which the Government has taken to improve the UK's resilience.[244]

221. The Local Government Association's (LGA) comment on the assertion that "local authorities have seen specific Civil Defence grant rise by more than a third over the last two years to £19 million for 2002-03" was that this level of grant was 50 per cent, in real terms, of what it had been ten years ago.[245] The LGA produced a research briefing setting out the costs of emergency planning to local authorities.[246] They estimate that local authorities are currently spending at least £36 million annually on emergency planning, which means that they are investing £17 million of their own resources over and above the £19 million from the Government.[247] The LGA's figures have not been challenged by the Government, and we consider that they provide a reasonable initial indication of the annual costs of the present service in England and Wales.

222. We recommend that the definitive version of the Bill should contain, in the explanatory notes, a detailed analysis of the current and projected costs of providing the emergency planning service.

223. One of the questions included in the Consultation Document was whether the level of funding to support the Bill was sufficient.[248] An overwhelming majority of local authorities indicated that the current level of funding was inadequate. The LGA pointed out that the Bill will put extra duties on local government.[249] Durham County Council reflected the views of many when they told us that there were completely new activities required by the Bill, including warning the public; promoting business continuity management in the community; taking action to prevent emergencies from occurring; participation in the new local resilience forums; participation in the initiatives arising from the new resilience forums; undertaking activities as directed by central government; and providing ongoing information to the public.[250] Devon County Council, in their written response to Question 8 of the Consultation Document, pointed out that the new definition of an emergency will include, for the first time, the need to plan, and respond to, threats to the environment.[251] The LGA contend that the scale of new duties proposed in the draft Bill, especially when extended to Shire district councils for the first time, will require a wholesale review of the funding provision.[252]

224. The Minister in charge of the Bill pointed out that there had been significant resources contributed by central government to civil protection through a range of responders over recent years and very significant increases in the funding had been provided. While he accepted that there is an important discussion to be had on funding, he took the view that the focus of the Bill is the framework for civil protection rather than the funding of civil protection. The Minister said that the way forward on funding was the discussions currently taking place between local authorities and central government which will find expression in the Spending Review decisions that are reached in SR2004. [253]

225. In our view, full consideration of the costs of legislative proposals is, as a general rule, an essential part of pre-legislative scrutiny. We are not satisfied with either the quality of the analysis of the effects of the draft Bill on financial and public service manpower, or with the Government's conclusions. The Government's approach seems to be that it is up to others to disprove its belief that current funding levels are sufficient to meet the proposals in the Bill. This approach is particularly problematic with an enabling measure that is largely dependent on draft regulations not available during the consultation process. In our view, it is essential that when enabling bills are subject to pre-legislative scrutiny, the draft primary and secondary legislation should be published simultaneously.

226. We therefore recommend that in future all enabling Bills published in draft should be accompanied by a comprehensive set of draft secondary legislation, to form the basis of an analysis of the financial and public service manpower effects of the proposed legislation. In the case of this Bill we recommend that both Houses only consider it if the explanatory notes published with the Civil Contingencies Bill contain a clear statement of the effects on financial and public service manpower and the explanatory notes address the shortcomings we have identified.

227. When it considered the draft Civil Contingencies Bill in July 2003, the House of Commons Defence Committee was concerned that the level of funding proposed in the Consultation Document was inadequate for the responsibilities envisaged under the Bill and recommended that we examine this issue further.[254] The evidence we have received reinforces those concerns. We share the belief that the introduction of new duties on local authorities, in conjunction with national standards and a monitoring process, will almost certainly require a greater level of planning and training than is currently performed by many Responders. Inevitably the implementation of the proposals in a Bill such as the Civil Contingencies Bill will cost money. The key point, however, is that the Government's consultation process was seriously flawed by the absence of draft regulations, making it impossible for Responders to estimate the costs of the proposals in Part 1 the Bill.

228. In these circumstances we recommend that the Cabinet Office, once it has revised its analysis of costs as suggested above, should publish at the conclusion of the Spending Review 2004 the resources the Government has agreed to implement the Bill fully and effectively.

Local contingency planning: grant funding arrangements

229. The Government proposes that funding for local contingency planning should be moved from a specific grant - Civil Defence Grant - to general grant, currently Revenue Support Grant. Under the proposed framework, funding for local authority civil protection work will be brought into the mainstream. In the view of the Government, direct grant has reinforced the isolation of civil protection planning as a function. The Government points out that both it and the Local Government Association are committed to reducing the amount of ring-fenced and specific grants made to local authorities by streaming all funding through Revenue Support Grant, other than in exceptional circumstances. The Government considers that there are no exceptional reasons why funding for local contingency planning to Category 1 local authorities should not be routed through Revenue Support Grant. It has also said that in addition to being in line with general policy, Revenue Support Grant funding will allow individual authorities to determine how best to allocate their resources to fulfil their responsibilities and to meet their priorities.[255]

230. The response has been mixed. A substantial number of local authorities support a move to mainstream funding, although with reservations. These reservations mainly relate to concern that funding intended for local contingency planning might be diverted to meet more pressing priorities and thus undermine resilience. The Local Government Association believes that, if Civil Defence Grant is to be phased out, there should be transitional arrangements for emergency planning funding to be ring-fenced or identified as a line in the Environmental, Protective and Cultural Services grant, for, say, 2-3 years, to allow this funding to be fully established in local authority expenditure plans, and to enable the service to measure up to public expectation. If Civil Defence Grant is transferred to the Formula Spending Share (the formula Government uses to work out what a council needs to spend to provide all of its services and thus their level of Revenue Support Grant), resource demand pressures from other services could overwhelm the emergency planning service.[256]

231. The Minister in charge of the Bill said that the move to Revenue Support Grant was about bringing a greater degree of autonomy to local government and moving away from discrete budgets for discrete areas of work. In relation to civil protection, the Government believes that the proposal would have the merit of ensuring that civil protection is mainstreamed within the thinking of local government as in central government. He said this approach was in line with the policy of the Local Government Association.[257] The Minister said, however, that the Government will not remove the specific grant until the new framework is in place. [258]

232. We do not wish, in this Report, to join in the debate on the general merits or otherwise of ring-fencing, but we are concerned that contingency planning should be adequately and transparently resourced. Because emergency planning has had a low profile and a history as a discretionary and uneven service, there is a risk that funds may be diverted to other priorities.

233. We therefore recommend, at the very least, that serious consideration be given to the introduction of transitional arrangements, for example a temporary ring-fencing of existing grant levels until such time as the new legislation beds down, appropriate infrastructures are established, and new funding streams identified. Alternatively, the Government should consider delaying the abolition of Civil Defence Grant for at least two years after the new arrangements commence to ensure that planning for and implementation of the provisions at Part 1 of the Bill are adequately resourced.

Business continuity management

234. As well as local arrangements for civil protection, the Government intends "to generate a resilience culture at the local level" and to require local authorities to promote business continuity management within their areas. The Government believes that resilience will be further strengthened by extending the civil protection duty beyond emergency planning to address risks to business in the local community generally. The Cabinet Office accepts that promotion of business continuity management elements will constitute an additional cost to local authorities, which they "may seek to defray by charging local businesses who respond to the initiative".[259]

235. In commenting on the Bill the Local Government Association questioned the proposal for a mandatory requirement for local authorities to give advice and assistance "to the public". It considered that the most likely recipients would be commercial business operators rather than members of the general public.[260] The Association advised that the potential for charging needed to be explored carefully and guidance given to local authorities on how to set charges in order to recover their costs.

236. A clear definition of what "business continuity management" actually means would have assisted respondents to the consultation exercise on the draft Bill. We assume it includes advice on technology recovery, disaster recovery, risk management, crisis management, as well as advice to organisations on increasing resilience to disruption, interruption or loss. We endorse the principle that the promotion of business continuity management should be encouraged. But the consultation documents do not spell out what the Government proposes and whether other mechanisms have been examined. Neither the type and scope of the business continuity management service proposed nor the costs of setting up the service, operating it, or the level of charges have been made clear.

237. We recommend that the principal elements of the proposed business continuity management service be set out in detail in the explanatory notes published with the Civil Contingencies Bill. It should include a business plan for the operation of the service in a typical local authority.

Emergency powers

238. The consultation documents published by the Cabinet Office include a Partial Regulatory Impact Assessment of the emergency powers at Part 2 of the draft Bill.[261] The Government takes the view that, as emergency regulations can be used to do anything that might be done by enactment or Royal Prerogative, it is not possible to be specific "at this stage" about the potential regulatory impact if they were used. The regulations may affect businesses, charities and the voluntary sector; but their nature and coverage would depend entirely upon the nature and scale of the emergency and the response and recovery strategy adopted. The Government states that the powers will only ever be used in extreme circumstances where any costs will be justified by the need to respond most effectively to threats to public safety and welfare. The proposals in the Bill will allow the powers to be used on a much more targeted and proportional basis than the existing legislation, which will mean only those organisations which genuinely need to be affected by regulations will be.[262]

239. We note the qualification "at this stage". This rather begs the question of whether there will ever be a stage at which the Government plans to be more specific about the potential regulatory impact. We accept that the Government cannot provide a fully fleshed out Regulatory Impact Assessment, but we do believe it could - and should - revise the present text to include, for example, case studies. Whilst these will not be comprehensive, they should show where resources flow, where costs fall and who controls the purse strings.

240. We recommend that the Government produces a revised and expanded Regulatory Impact Assessment of the emergency powers at Part 2 of the draft Bill.

Bellwin scheme

241. The Bellwin Scheme is based on a statutory provision at section 155 of the Local Government and Housing Act 1989, and gives Ministers discretion to reimburse local authorities for immediate action to safeguard life and property or to prevent suffering or severe inconvenience in their area following an emergency or disaster. A review of the Bellwin Scheme was conducted in 2001, following which the Government concluded that a change to the statutory basis of the Scheme would not be appropriate.[263]

242. In the view of the Government the Civil Contingencies Bill will represent a "thorough revision of general emergency related legislation [and] will result in a comprehensive legislative framework appropriate for the twenty-first century".[264] The Committee is therefore surprised that there is not a single reference in the consultation documents to the Bellwin scheme, which is a pillar of the emergency framework in England and Wales and which had been reviewed only two years ago.

243. While the Minister in charge of the Bill told us that the Bellwin scheme was retained by agreement with the Local Government Association,[265] during our consideration of the draft Bill representatives of local authorities expressed concern to us about the operation of the scheme. The "Bellwin" process was described as "a very discretionary and very bureaucratic process", and the expenditure threshold was said to be too high. It was suggested that an alternative mechanism - a reserve contingency fund - would give local Responders the confidence to make financial decisions during emergencies that were not going to enfeeble their ability to provide other services.[266]

244. We are not in a position to give a considered view on the strengths and weaknesses of the Bellwin scheme, or possible alternative arrangements. But we would recommend that the Government, when it comes to finalise the Bill and its supporting documentation, explains the part which the Bellwin scheme plays in resilience and how it fits within the new framework.

224   Cm 5843. Back

225   Ibid, note 58. Back

226   Regulatory Impact Unit and Cabinet Office (2003) Better Policy Making: A Guide to Regulatory Impact Assessment, para 1.1-1.2 at Back

227   Ibid, para 3.6. Back

228   Ibid, para 3.11. Back

229   Partial Regulatory Impact Assessment (Local Responders) paras 28-30. Back

230   Ibid, para 33. Back

231   Ibid, para 75. Back

232   Ibid, para 78. Back

233   Ibid, para 76. Back

234   Ibid, para 65. Back

235   Ibid, paras 46, 49 and 59. Back

236   Ibid, para 74. Back

237   Q 346, Mr Miller (United Utilities). See also Memorandum from United Utilities, Ev 147, question 6. Back

238   Memorandum from BT, Ev 134, question 6. Back

239   Q 350, Mr Turner (British Telecom). Back

240   Memorandum from British Energy, Ev 192, question 6. Back

241   Memorandum from CE Electric UK, Ev 196, question 6. Back

242   Q 278, Mr Alexander (Minister of State, Cabinet Office). Back

243   Q 237, Mr Alexander (Minister of State, Cabinet Office). Back

244   Consultation Document, pp 13-14. Back

245   Q 11, Councillor Chalke (Local Government Association). Back

246   Local Government Association (July 2003) Emergency Planning: A Survey of Top Tier Local Authorities. Back

247   Q 11, Councillor Chalke (Local Government Association). Back

248   Consultation Document, Q8. Back

249   Q 11, Councillor Chalke (Local Government Association). Back

250   Q 89, Mr Cunningham (Durham County Council). Back

251   Memorandum from Devon County Council, Ev 203, question 8. Back

252   Memorandum from the Local Government Association, Ev 1, para 4.1.3. Back

253   Q 284, Mr Alexander (Minister of State, Cabinet Office). Back

254   Seventh Report of Session 2002-03 (HC 557), para 58. Back

255   Consultation Document, para 33, p 20. Back

256   Memorandum from the Local Government Association, Ev 1, para 4.2.1. Back

257   Q 285, Mr Alexander (Minister of State, Cabinet Office). Back

258   Q 286, Mr Alexander (Minister of State, Cabinet Office). Back

259   Consultation Document para 23 on page 19 and Partial Regulatory Impact Assessment (Local Responders) para 57. Back

260   Memorandum from the Local Government Association, Ev 1, paras 3.3.1-3.3.2. Back

261   Partial Regulatory Impact Assessment (Emergency Powers). Back

262   Partial Regulatory Impact Assessment (Emergency Powers) paras 6 and 7. Back

263   Questions for the Bill Team, Appendix 9, question 47. Back

264   Consultation Document, p 41. Back

265   Q 288, Mr Alexander (Minister of State, Cabinet Office). Back

266   Q 108, Mr Cunningham (Durham County Council). Back

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