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Lord Lucas moved Amendment No. 67:

Page 22, line 29, leave out subsection (6).

The noble Lord said: I spoke to this amendment with Amendment No. 44. I beg to move.

On Question, amendment agreed to.

Clause 37, as amended, agreed to.

[Amendment No. 68 not moved.]

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Clause 38 [Payment of grants: general]:

[Amendments Nos. 69 and 70 not moved.]

Clause 38 agreed to.

Clause 39 [Delayed payment of mandatory grant]:

Lord Lucas moved Amendment No. 71:

Page 23, line 2, leave out ("prescribed") and insert ("specified by order of the Secretary of State").

The noble Lord said: This amendment changes into an order-making power the power contained in Clause 39(2), under which the Secretary of State may specify the period by which an authority may delay the payment of disabled facilities grant. We recognise that the Committee is concerned about the use of delegated powers and our amendment brings this power under parliamentary control.

The amendment is grouped with Clause 39 stand part but I should let other Members of the Committee speak on that Motion first. I beg to move.

Lord Dubs: I assume that we are speaking on Clause 39 stand part as well as Amendment No. 71. As regards Amendment No. 71, I welcome the fact that there will be parliamentary control over the time period; but I find it difficult to understand the thinking behind this matter altogether. I am clear that as regards Clause 39(1) there may be a case for delaying the payment of a grant in order that it coincides with the time that the building work is being carried out and paid for. I assume that that is the reason for Clause 39(1).

As regards the maximum 12-month delay, I do not understand the thinking behind it at all, unless it has something to do with the building work being completed and the money being paid 12 months after the work has been finished. Frankly, I am not clear about its purpose. In any case, I should like some assurance that there is no intention to make the 12-month period longer--it may now be specified by order as longer or shorter--and that, if anything, one would shorten the period to below 12 months.

The whole clause has within it yet another possibility for delay in proceeding with matters. We have discussed it on more than one occasion recently. I hope that there will be no further reason for disabled people not to have the work done and paid for as quickly as possible.

Baroness Hamwee: I join the noble Lord, Lord Dubs, in questioning Clause 39, particularly in the light of the comments made by the noble Lord, Lord Lucas, on the set of amendments that I moved a moment ago. It seems a little inconsistent to show such trust in local authorities one minute and the next minute to have such a power with regard to delay.

I am also concerned in case there might be a link with funding the grants. One can see that it might be in the Government's interests to ensure that payment is spread, given the link between government grant to local authorities and local authorities meeting grant applications. I am sure that there is nothing so devious in the Government's mind, but perhaps they could say so.

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Lord Lucas: Under Section 117 of the Local Government and Housing Act 1989, where an authority has approved a grant application it must pay the grant--in whole or by instalments--once the works have been completed to the satisfaction of the local authority and suitable invoices have been provided.

That means that authorities have little scope to manage their financial resources by prioritising cases where mandatory grant is an issue.

The proposal will not mean that an applicant will necessarily have to wait longer to receive adaptations. Under the grant arrangements an applicant may have to wait up to six months for his application to be approved, following which he has a further 12 months in which to carry out the works. That means that he may have to wait up to 18 months to receive adaptations. Our proposal envisages that an applicant will not be required to wait longer than 12 months after he makes his application.

We believe that our proposals will help authorities in their financial management by giving them the discretion to withhold payment of mandatory disabled facilities grants for up to 12 months after the date of the application. That would only apply if the authority, when giving the applicant notice of its decision on the application, informed the applicant of an earliest date for payment.

We brought forward the proposal to provide authorities with an additional administrative tool to enable them to schedule payments more efficiently--including between financial years where necessary--and thus to exert some control over mandatory grant expenditure.

In recognition of the Committee's concerns about inappropriate delegated powers, we introduced a government amendment which brings under parliamentary scrutiny the Secretary of State's power to vary the 12-month limit. I can give the noble Lord, Lord Dubs, the reassurance for which he asks; that is, that we have no present plans to change the 12-month limit. We envisage that authorities should only need to use the measure sparingly and in exceptional cases. We will be making that clear in the guidance that we issue to them. We have no reason to believe, therefore, that applicants should in practice face unreasonable hardship.

9.30 p.m.

Lord Dubs: Perhaps I can clarify one point. I was concerned lest the 12-month period be extended, but I was hopeful that it would be shortened.

As I understood the first part of the Minister's speech, he said that the powers were there to enable local authorities to delay payment if they did not have the money in any specific financial year. Therefore, it is a way of juggling their finances in order not to have to make too many mandatory grants at an inconvenient time for them in one financial year.

I understand that, in one sense, the financial control is therefore made easier for local authorities. On the other hand, what about the disabled person? It means that the disabled person may have to wait fully 18

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months, if I take the periods mentioned. It seems hard that a disabled person who is entitled to a mandatory grant can have it delayed for the reasons given by the Minister. I am not happy that that is being done in the way the Minister described. However, I take some comfort from what the Minister said when he indicated that that would only be appropriate in exceptional circumstances. If it is made clear to local authorities that it is a highly exceptional procedure--a highly exceptional escape clause for them--then perhaps my alarm is less than it would otherwise have been.

Lord Swinfen: Perhaps my noble friend will be able to reword the clause to show that the provision will only be used in exceptional circumstances. I had not meant to speak on clause stand part at this point. Because of my suggested groupings some time ago, I thought it would be discussed with Amendment No. 63 and we have dealt with that. However, I am often mistaken.

I share very much the concerns on this point referred to by other Members of the Committee. Perhaps my noble friend will give thought to making clearer the fact that the clause can only be used in exceptional circumstances.

Lord Lucas: We believe the right place to make that clear is in guidance and we will do that.

On Question, amendment agreed to.

Clause 39, as amended, agreed to.

Clause 40 agreed to.

Clause 41 [Payment of grants: conditions as to contractors employed]:

Lord Williams of Elvel moved Amendment No. 72:

Page 23, line 30, at end insert ("and competition between contractors for grant work will disregard that part of the estimated cost of works attributable to value added tax").

The noble Lord said: The purpose of this amendment is to ensure that VAT is not taken into account when comparing estimates from contractors for grant work, thereby removing the competitive advantage enjoyed by companies which are not registered for VAT or are below the threshold for VAT. The Committee will be aware that many tradespeople operating in the sector of the building industry which deals with small-scale repair and maintenance work have a reputation for poor quality work. If the quality of work and the level of client satisfaction are to increase, it will be necessary to make it more difficult for cowboy builders, as they are called, to operate. Currently an application for renovation grant must have at least two estimates. That is repeated in the Bill. Grant is payable on the lower figure, subject to limits. VAT is not given special consideration so that two contractors can put in identical prices but it is the one not registered for VAT who will get the contract.

The current arrangements for awarding grant work effectively provide a competitive advantage to such firms. For instance, Bradford estimates that approximately 15 to 20 per cent. of all accepted tenders for renovation grant work are from VAT unregistered firms. There is a general feeling that firms that are not VAT registered are at the margins of being reputable, if

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I may put it in the most polite manner. The Building Employers' Confederation has therefore proposed that VAT be discounted from tenders for renovation grant work when considering the lowest tender for the work. If the amendment is accepted, that will protect reputable VAT registered building firms from undercutting. I hope very much that the Government will consider the proposal and give a considered response. I beg to move.

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