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Lord Harris of Haringey: I, too, wish to place on record my belief that considerations of equity must be seen as integral to the duty of best value. I could easily be persuaded of the importance of it being sufficient for the definition of best value and for the issues around equity to be covered in guidance, but I should like to support the suggestion made by the noble Lord, Lord Hunt of Tanworth, that it would be helpful for us to see that guidance, or draft guidance, prior to the conclusion of our considerations of the Bill.

I certainly believe that equity must be a critical part of local government responsibilities. We have had the Macpherson Report into the death of Stephen Lawrence, which raises very wide issues for all public authorities, including local government, about the way in which it delivers services and about issues of institutional racism. We have to make sure that our services are delivered fairly and equally to all of our local citizens. That must be an essential prerequisite for tackling issues of social exclusion and a fundamental part of the work of local government. I hope that the Minister will be able to indicate that the guidance will be published before we complete our consideration of the Bill so that we can see exactly how that is expressed and satisfy ourselves that that duty is being enforced by all local authorities without it needing to be on the face of the Bill.

Lord Dixon-Smith: I, too, express the hope that the Minister can be helpful on this particular matter. I am old-fashioned and have always believed that promoting the wellbeing of the community was the only reason for being involved in a local authority in the first instance. If you do not have that as a primary ambition you should never have started down that particular road. Whether you translate that into the modern, single word "equity" is entirely another matter, but this is an important issue.

Although those who are also old-fashioned might regret that we have to express more of such detail in Bills, they are becoming more specific. Therefore such detail has to go in. It would be a serious omission from the Bill, given its particular impact on the way in which local authorities are to function, if it was not included in instead of included out.

Lord Whitty: Perhaps I may deal with some general issues before turning to the amendments themselves. I take the point from the noble Lord, Lord Hunt of Tanworth, that wellbeing is of great importance in our whole approach to local government reform. It was a

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significant issue within the White Paper. The Bill is not, however, the totality of our approach to local government reform. You will already be aware that there is another draft Bill dealing with aspects of the reform agenda not covered here. Furthermore, aspects which were covered by the White Paper on which legislation or other measures to deliver the objectives, will at some point be necessary.

I would very much welcome a general discussion on the issue of wellbeing. However, we have not thought it appropriate to write in wellbeing provisions into the Bill because it is primarily about the way in which local government conducts its management and delivers its services, and to some extent its financial control, rather than the broader objectives of local government. That will come later in the reform programme, and will probably require some considerable discussion in this House in various forms. I would certainly welcome an opportunity to discuss that, as the noble Lord suggests.

In relation to the provision of guidance under these clauses, last month we issued some preliminary guidance which I have made available to your Lordships. However, I cannot give the guarantee I think the noble Lord is requesting; that we will finalise our guidance before the Bill passes through its various stages in this House. Having set down preliminary guidance, the intention is to consult in June and to issue the statutory guidance after the Bill has been passed. This is of course the case with most guidance under statute. Nevertheless, the preliminary guidance, and what has been said by my colleagues and myself in the course of these deliberations, will give a clear indication as to the way in which we are approaching the final guidance.

The amendments focus on the issue of equity. Amendment No. 9 would directly add equity to the list of functions. Amendment No. 30 and following amendments would correspondingly add equity to the list of factors to be taken into account in setting performance indicators and carrying out best value reviews.

I have great sympathy with the noble Baronesses, Lady Hamwee and Lady Miller, on the Liberal Democrat Benches. Nevertheless, it would not be appropriate to write equity into the Bill in this form. The Government consider it essential that as a result of introducing best value, our local authorities concentrate on service outputs and outcomes. Thus, those responsible for audits--and local people generally--can assess local authority performance against outputs and outcomes.

We have defined the process of best value in terms of economy efficiency and effectiveness, backed up by a set of national indicators relating to output. Those indicators would not be drawn narrowly. For example, we are looking at a series of indicators under the "effectiveness" banner, which reflect fair access to services, as referred to by the noble Baroness, Lady Miller. Fair access could be regarded as being equity under another name. There will certainly be key indicators against which best value will be assessed and which will include fairness. I can confirm that the

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statutory guidance on the three Es will indeed make clear that effectiveness includes equitable access to services and fairness. Our approach to performance indicators, therefore, will reinforce this and there will be indicators of fair access to services. Fairness, however, will not be the only one. Local authorities will themselves be free, of course, to develop their own indicators to reflect the priorities of their own electorates.

It should also be remembered that our approach to consultation under this Bill is designed to ensure that all sections of the community have a voice in determining the priorities of service delivery. The noble Baroness, Lady Miller, expressed concerns with which I sympathise. I can reassure her that the duty of consultation will be framed as widely as possible in order to include all of those who have an interest, whether or not they have access to e-mailing and whether or not they are organised in direct bodies who would normally be consulted. That will be made clear in our guidance.

There is a problem, however, with writing equity as such into these criteria, as distinct from ensuring that equity--or at least fairness, the term I would prefer--is a criterion under the effectiveness banner. I recognise, incidentally, that Amendment No. 31 also refers to sustainability but perhaps the noble Lords would not mind if we deal with that under Amendment No. 10.

Consideration of factors such as equity will indeed be an intrinsic part of delivering effective services and local authorities could not sustain their position, were they not to pursue fairness in that sense. However, there is difficulty with what equity actually means and whether the local authority could be challenged for not delivery equity. There was indeed some slippage in certain things said by the noble Baroness, Lady Miller, between the terms "equity" and "equality". If that is the case with the noble Baroness, then it will certainly be the case with many of the people who respond to the way in which local authorities deliver services.

A group of ratepayers objecting to the way in which a local authority conducts its business may well say that they were created equally and therefore were contravening the determination of the Act relating to equity as an overriding provision. Because there is this public confusion between equity and equality-- and, frankly, to meet the kind of problems to which the noble Baroness herself was referring in terms of current inequalities--it may be that inequality of output may be a desirable and fair objective. However, as there is confusion between equality and equity, there is a problem in writing equity on the face of the Bill. The term "effectiveness" will incorporate fairness. Authorities individually will need to take a strategic approach as to how they interpret best value and how best they meet it. They need to prioritise their functions for review, based upon an objective assessment of how well they are performing against clearly understood and consistently-based criteria. Those criteria may well have an equity element built into them but they have little

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chance of doing so if it is unclear what exactly makes up their duty and if there is some lack of clarity as to what the term "equity" means in this context.

The best way to ensure that the duty is comprehensive in scope is to encourage joint working by means of proper use of performance measurement and its framework and statutory guidance. That statutory guidance will ensure that fairness of access in particular is a major criteria for the delivery of services.

There are a number of points lying behind the concerns that have been expressed. I hope my objection to the inclusion of "equity" in this context cannot in any sense be interpreted as saying we object to the objectives behind the moving of these amendments. Nevertheless, we do not believe that the inclusion of "equity" at this point and in these forms would be appropriate in the Bill.

5 p.m.

Baroness Hamwee: The Minister tempts me to think of another way of approaching this issue on Report and I am not going to resist that temptation. However, it is worth making some further points now because the Minister may care to come back at this point.

The noble Lords, Lord Hunt of Tanworth and Lord Harris of Haringey, referred to guidance and the material which has gone round to local authorities does not go very far at all in talking about the criteria which are to be applied. So I share their concern to see something more substantive.

There are at least two problems in relying on guidance. Guidance can be altered by the same Secretary of State or, indeed, by a subsequent Secretary of State, so that whatever is in guidance may not last the course of the best value duty. Secondly, can the Minister assist the Committee on the status of guidance when it comes to the courts interpreting the criteria? It seems to me that an explanation in guidance as to what will satisfy the test of effectiveness will not even get into the Pepper v. Hart arena of material on which the interpretation of the statute can be based. As I understand it, Hansard is only referred to if the statute is not clear and effectiveness seems to me to be a pretty clear term. Even if it were not a clear term and the courts had regard to what this House and the other place have to say on the term "effectiveness", having the explanation in guidance will not be of any assistance unless we get draft guidance early enough for us to have a debate on what it has to say, so that we can get into Hansard a ministerial assurance as to what it means.

On the point of whether "equity" is the right term, I will not be the only one who will be open to suggestions of synonyms. I was glad to have the Minister's confirmation that "effectiveness" will include fairness. However, before that he said that the Bill is about how local government conducts its management and delivers services as if best value is pretty much confined to value for money. I would much prefer to rely on the second part of what he said to the first part. However, I am sure this will be a matter to which we will need to return

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because, as the noble Lord, Lord Harris, has said, it will be integral to the new duty. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 9 not moved.]

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