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Baroness Hollis of Heigham: My Lords, before the Minister sits down, I should like further clarification. If the adjudication officer receives from the BAMS doctor a statement saying that he does not believe that the claimant falls into the exceptional circumstances category and the adjudication officer is not persuaded by that opinion, does that mean that the AO may invite a second medical opinion and may indeed be bound by or follow that second opinion? In other words, I wish to know where the initiative lies for making the final judgment.
Lord Mackay of Ardbrecknish: My Lords, as a result of a court judgment, the initiative obviously lies with the adjudication officer. That is why we are here this evening. Therefore, if the BAMS doctor does not make the observation but the adjudication officer has other evidence presented by the client--perhaps, as I mentioned earlier, from the client's own GP--then the adjudication officer has to make a judgment. He is not bound by the judgment of the BAMS doctor.
The noble Earl said: My Lords, the order will enable local authorities to contract out their executive functions under Parts VI and VII of the 1996 Housing Act. Where an authority does so it will have to set out exactly how the allocation scheme should be operated and it will have to decide which classes of person are, or are not, qualifying persons who would be entitled to appear on the register. The authorities will remain ultimately responsible for any functions which are carried out on their behalf by contractors.
We consulted the local authority associations in England and Wales in October and we received no objections on the proposals which are set out in the order. The order is welcomed by local government and is needed by local authorities which have transferred stock. I commend the order to your Lordships.
Baroness Hollis of Heigham: My Lords, I am not sure that all is well in the best of all possible worlds as the noble Earl seemed to indicate in his introduction. The order gives local authorities the power to delegate to other bodies the exercise of most of their allocation and homelessness functions under Parts VI and VII of the 1996 Housing Act. It particularly applies to local authorities which have transferred their council housing stock to private companies under large-scale voluntary transfer arrangements and validates their work, excluding only certain listed functions set out in Schedule 1.
While it is right to allow local authorities as much discretion as possible as to how they operate this law, consistent with their legal responsibilities--and we therefore have no objection to that aspect of the order which insists that certain functions, especially the financial ones, cannot be delegated--we nonetheless believe that the order is far too narrowly drawn. In our view, other responsibilities should also have been ring-fenced and should not be available for delegation.
We believe that the order permits a local authority to delegate functions to another body so far as concerns homelessness which should not be so delegated. For example, I refer to such decisions as to whether an applicant is homeless, in priority need, is not intentionally homeless, and has a local connection. We believe that those key policy decisions should be determined by the local authority because it is held responsible for that under the law and is accountable in the courts for its actions.
We believe, therefore, that the order fails to ring-fence enough of those functions. First, it allows the local authority to delegate the assessment of homelessness to an agent even though the local authority will remain responsible in law. I believe that any local authority which delegated such a function would be acting unwisely, putting itself and its council taxpayers at risk of a legal action on the lines of fiduciary responsibility. The Minister will be well advised to consider that issue. I believe that a local authority will put itself and its taxpayers at risk.
Secondly, I believe that the Government, to a degree, are acting somewhat in bad faith. I and the noble Earl were involved in handling this section of the Bill when it went through the House, as was the Minister. At no point that I recall did the Minister indicate that private companies should be allowed to exercise and determine these pivotal functions and decisions. Throughout the debates during the Bill the Minister emphasised that local authorities retained their responsibility under the law. We were led to believe that that meant that as a function they could not be delegated.
When at any stage during the passage of the Bill did the Minister clarify the distinction between delegation and responsibility, as he now does? We believe that it was inappropriate. These regulations were not encompassed by debate when the Bill was passed. It was not our understanding, and had the Government indicated that that was their intention, I for one, and I am certain the noble Earl too, would have moved amendments to exclude that possibility and to get on record in Hansard our concern about such a possibility. We did not do so because we did not understand that the Minister had that in mind. At no point did he make clear that that was his intention. I believe that that was not in good faith.
Thirdly--it is perhaps the point that really matters--these regulations will now make homeless people even more vulnerable than they are currently. The work in determining whether someone is homeless, and the right response to their homelessness, is highly sensitive work. Such homeless people may now find that private companies rather than their elected local authority and councillors will determine their rights to perhaps the most important asset in their life--a decent and stable home. We may find that private bodies, not necessarily working within the professional codes of local government, will be handling highly confidential material supplied by a general practitioner on physical and mental health, issues of domestic violence and abuse, immigration status, and the like.
Such matters should not be handled by private companies not controlled by the proper ethical standards of local government. It is quite improper, particularly as private companies and private landlords are not exactly well known for compliance with the law on such issues as race and sexual harassment. After all, increasingly people are homeless because the private sector has evicted them. The Government expect the private sector to rehouse them. On top of that they ask the private sector to lay down the rules and determine who shall be housed by whom and when. We think that that is unreasonable, inappropriate and unfair.
The Government are effectively releasing local government from its statutory duties but not from its legal responsibility. We warn local authorities now to take the advice of the local authority associations not to go down that road because trouble lies at the end of it.
Earl Russell: My Lords, I, too, have misgivings about these regulations, to put it no stronger. I confirm what the noble Baroness said about there being no mention of this point at any stage during the passage of the Bill. It is not impossible--I choose words carefully--that at least one Division might have gone a different way had that information been available. It surprises me very much that there is no restriction in the regulations in terms of the competence of the body to which functions are delegated. For all we know it might be a body such as Group 4. There are no clear provisions about avoiding conflict of interest; and there are many chances of that.
While I was pleased to hear what the Minister said about the local authority being ultimately responsible, there are some quite big problems here. I am not convinced that they have been thought through. The local authority will be liable to judicial review because it is its duty. But how far can we answer for the conduct of people other than ourselves? Can we have a categoric assurance that the company to whom all functions are delegated will not be allowed to plead commercial confidentiality when the local authority's duty is at stake?
Can we be told whether the local government ombudsman will retain jurisdiction over functions carried out by a contracted body? Can we be told whether a review under Section 204 of the Act may be delegated? If so, we should remember that it is the basic principle of natural justice that a body may not be judge and party in its own cause. I should have thought that the risk of that principle being broken was perfectly obvious.
Earl Ferrers: My Lords, I am sorry that the noble Baroness did not find it in her mind to approve the regulations in the way that I had hoped she would. It was made perfectly clear throughout the Housing Bill that that was what was intended. We consulted local authorities in October and received no objections to the proposals.
The noble Baroness said that it would be quite wrong for the private sector to lay down rules as to who should be housed and when. That is where the noble Baroness is greatly mistaken. It is for the local authority to lay down the rules under which the contractor, for want of a better expression, will operate. It is up to the person who takes that responsibility on to abide by the contract. It will be for the local authority to determine who shall or shall not be a suitable person to be housed. It is only the executive function that will be carried out by the other body. I do not think that there is anything wrong or particularly unique in that. We have seen it in many other cases.
Perhaps I might ask the noble Baroness to address her mind to a different sort of case, but one which caused all the fuss to start with; namely, when prisons were contracted out. The fact is that it depends on what is written in the contract. There is no reason to think that this will not be done just as well under the present system.
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