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Lord Hunt of Tanworth moved Amendment No. 12:

Page 2, line 34, at end insert--

("(4A) Experimental decision-making arrangements may not include arrangements for the membership of any ordinary committee of a local authority which is appointed to scrutinise the exercise of any functions of the authority to be determined otherwise than in accordance with the political balance requirements.").

The noble Lord said: I spoke to Amendment No. 12 when the Committee debated Amendment No. 1. I beg to move.

On Question, amendment agreed to.

Baroness Hamwee moved Amendment No. 13:

Page 2, line 39, after ("efficient") insert (", effective").

The noble Baroness said: I beg to move Amendment No. 13 and speak also to Amendment No. 14. I believe that Clause 1(5), the subject of these amendments, is pivotal to the Bill. It requires that the proposed arrangements are likely to improve the decision-making process and that regard is to be had to effects in certain areas, one of which is that the arrangements are likely to lead to the authority's decisions being taken in a more efficient and accountable way.

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One would not quarrel with efficiency or accountability. I have sought to add another two adjectives to deal with effectiveness and openness. I believe that "effectiveness" is about the outcome of an action and "efficiency" describes the means. I dare say that all noble Lords involved in this Committee stage are well aware of the Audit Commission's strictures about efficiency and effectiveness. One is told by the commission that these are different aspects. A lack of efficiency may not be caused by administrative arrangements; indeed, there may be other reasons. For example, because local authorities are large in population and in budget terms compared with councils elsewhere, or because of the average number of councillors per council. There are lots of reasons for lack of efficiency. I believe that "effectiveness" more closely describes what I should like to see in a local authority.

To mix all of the words up, one can be efficient in a democracy only if one is sufficiently open and accountable. It may be that accountability includes openness. I table these amendments, in particular the second one, to ask both the noble Lord and the Minister to expand on the operation of Clause 1(5)(a). Like other noble Lords, over the years I have had experience of differing views of those from different backgrounds which have been brought to bear on the decision-making process. After the abolition of the GLC I remember very well the early meetings of the business-led organisation London First, which involved representatives of local government. For me it was characterised by the very different approaches of the two sectors. Those who came from a business background when presented with what they believed to be a good idea said, "That's great. Let's do it"; those who came from local government said, "That's great. Let's consult on it". There is something to be said for both approaches, but openness and taking the matter outside the council chamber is a matter of which we should not lose sight. An executive mayor or cabinet committee must have a particular task to meet levels of openness that may not need to be expressed in the case of committees which are, in any event, required to be open. I beg to move.

Baroness Farrington of Ribbleton: When I chaired the education committee in an authority, which necessarily has the largest budget, the Audit Commission's use of the terms "efficiency" and "effectiveness" were always linked with the heavily-stressed "economy" when people spoke to me.

The Government will be content for the words in Amendments Nos. 13 and 14 to be inserted and become part of the Bill. They are clearly in line with the benefits which we anticipate will arise out of the experimentation under the Bill.

Lord Hunt of Tanworth: I too am happy to accept these amendments, which reflect the aims of the Bill. I am grateful to the noble Baroness for moving them.

Baroness Hamwee: I commend the amendments to the Committee.

On Question, amendment agreed to.

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Baroness Hamwee moved Amendment No. 14:

Page 2, line 39, after ("efficient") insert (", open").

The noble Baroness said: I have spoken to the amendment but I did not say thank you on the previous occasion. I beg to move.

On Question, amendment agreed to.

Baroness Hamwee moved Amendment No. 15:

Page 2, line 43, leave out ("for members of the authority") and insert ("to call for the attendance of and reports from any executive mayor, executive elected mayor, executive ordinary member, the Chairman of any ordinary committee and any officer entitled to discharge any functions pursuant to subsection (3) and ").

The noble Baroness said: In speaking to this amendment, I will speak also to Amendments Nos. 16 and 17.

I apologise to the Committee for the fact that on Amendment No. 15 the words "for members of the authority", which it is proposed to remove, should not be removed, even though the clause would still read comprehensibly with those words taken out.

What I seek to do by these amendments is to understand a little more fully--the point has, to some extent, been dealt with by Amendment No. 12--the powers of the scrutiny committee; its powers to call for the attendance of individuals and for reports from them. If the powers are not specifically provided by the Bill, will the committee have those powers? I come from the school of hard knocks, and have often been told that if the power of a local authority is not expressed, then it does not have it.

Amendment No. 16 seeks to widen the activity a little by assessing and reporting on the proposed exercise of any such function. This may have been overtaken to some extent by Amendment No. 12.

Amendment No. 17 arises from a report of a recent conference on this subject at which Professor Stewart, who is noted for his energy in looking at ways of doing things locally and his support for local government, suggested that there might be a connection between the scrutiny function and decentralised committees working on a localised neighbourhood basis.

As was said on Second Reading, many authorities--particularly those run by members of my party, but not only so--have put into place new administrative arrangements which include neighbourhood localised area committees. Are those committees to have any sort of role in the scrutiny procedure?

It would be a great shame if the advances made in this area--the innovations which have been so successful--were in any way held back by such committees not being properly involved in the scrutiny of the executive. I look forward to comments on this matter. I beg to move.

8.15 p.m.

Baroness Farrington of Ribbleton: Although the Government may share the concern which appears to have prompted Amendments Nos. 15, 16 and 17, we cannot support them.

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Amendment No. 15 goes into some detail about the powers that may accompany the exercise of the scrutiny function. We would expect scrutiny committees to operate in very much this way in a number of authorities but we do not believe that it is helpful to set all this out in legislation. The detail set out in this amendment may not be appropriate to each authority; for example, it may be that most chairs of an authority are non-executive members who would be responsible for the scrutiny function, rather than subject to it as they would be under this amendment.

Furthermore, this amendment is constrained to only those functions discharged by a person acting under arrangements made under Clause 1(3) of the Bill. Might not an authority want to set up similar processes for scrutiny of decisions made through structures which are currently possible under existing legislation? I am not sure, because we do not know what sorts of experiments local authorities may propose. I do not know, therefore, whether this amendment would cause any difficulties in such circumstances. It does seem likely that it might.

It would also be curious to define in a rather precise way one particular process which will then form part of the criteria for assessing whether an authority's application should be approved. An authority which produced proposals that included different but equally effective procedures for scrutiny and that suited its own circumstances might well have less chance of approval than if it adopted the set format in this amendment, even if it were unsuited to that authority. This would be an unfortunate result from such a well-meaning amendment--one with which many of us could sympathise but not, therefore, support.

Much the same argument applies, in our view, to Amendment No. 17. I do not argue here either for or against the presence of area committees in any structure a local authority might adopt. But, again, it is perfectly conceivable that an authority could define arrangements which brought decision making closer to the people without necessarily adopting a formal area committee structure. So why use this as a criterion for judging whether a particular proposal would improve matters? We find this amendment also too prescriptive.

Turning to Amendment No. 16 the arrangements suggested by this amendment would be a recipe for a hamstrung authority, particularly when taken with Amendment No. 15. The structure these amendments would create is one where any decision which is to be taken by any means other than that which would be permissible under the current legislative framework would be held up if the scrutiny committee so wished, until such time as it had called for evidence from various quarters, including the executive, and reported on the proposal. Such arrangements, if applied in a general way, could make it very difficult for any separate executive, be it a committee or an individual, to operate effectively. They do not seem appropriate in a Bill which seeks to promote more effective decision taking.

Some of the ideas underlying these amendments may be seen in many applications from authorities--and the Government may often welcome the arrangements

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where this is so--but scrutiny arrangements will not always take the form described in these amendments. We therefore do not believe that they should appear as part of the criteria for judging whether a proposal is likely to improve the decision-making process. For those reasons, we cannot support the amendments.

The powers that an authority will have will be established by the arrangements approved by the Secretary of State, and the legislative modifications made by order under the Bill. One would expect that in any particular experimental set of arrangements, the scrutiny committee may perform the processes referred to in the amendment. I hope that the noble Baroness will understand that we do not seek to negate them as possible, or even probable, arrangements within particular processes; rather we seek to prevent their becoming prescriptive or part of the automatic criteria.

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