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Lord Whitty: Like my noble friend Lord Bassam, I was slightly taken aback by the strength of the feeling that these were new, centralising powers never employed by previous governments. We all welcome conversion, but not only has my noble friend Lord Bassam quoted Margaret Thatcher, but the noble Lord, Lord Dixon-Smith, although he was at the other end of the "telescope" at that point, must recognise that this provision replaces a very prescriptive and interventionist regime. After all, the Bill removes CCT and universal capping. We all believe in local government and our intention is to give greater power back to local government. Best value provides a new context in which local government can take initiatives and operate in new ways to deliver to its people. However, there is also a national interest to be represented, and we make no bones about the fact that there are situations where the Secretary of State has to intervene to improve the performance of local government, to the benefit of local people.

The noble Baroness, Lady Miller, referred to the "mixing up" of terms. It may be helpful if I briefly set out where the various terms arise. These clauses allow the Secretary of State to specify, by means of an order, a number of different factors: performance indicators--by which we mean indicators against which the performance of best value authorities will be measured; the standards that those authorities will meet when exercising their functions; and key elements of their best value performance plans. Therefore, there are three separate approaches.

As to how the Secretary of State achieves the improvements in performance, there are a number of different ways in which he or she can intervene. In drafting this provision, we have considered carefully what is the right balance between secondary legislation and departmental guidance.

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In cases where there is a national interest or an overarching need for consistency, we have opted for an approach based on orders. We shall therefore use orders when setting out the performance indicators, the standards against which a best value authority must report, and the key elements which must be in a best value performance plan. Even the noble Baroness, Lady Miller, indicated that we need some yardsticks against which to judge that performance.

Where, on the other hand, we are seeking to promote a diversity and flexibility of approach which is related very much to local circumstances, we are of course approaching that via guidance--for example, when setting performance targets.

There is a national interest which we are recognising in the Bill. We need comparisons set down by order so as to measure comparisons between the performance of local authorities, but that is one key factor only. In other areas, we shall rely on guidance and promote flexibility and diversity within local authorities. There are, of course, already performance indicators. The Audit Commission uses them already, and we are building on the work that it has done. When intervention occurs as a result of Clause 14, it will be based on the current levels of performance as compared with other authorities. It is in the interest of authorities that those comparisons are consistent and that, if there is any question of intervention, they are based on a common approach and common criteria.

That has identified what lies behind the clause as drafted. Amendments Nos. 55, 56 and 57 relate to those changes in the draft Bill. I have already made it clear that the Government believe it appropriate to provide the Secretary of State with order-making powers. Those powers will be supplemented by powers to issue guidance. A power merely to issue guidance, which is the purport of the noble Lord's initial amendment, is not sufficient to ensure consistency and transparency, and that local authorities know what performance they are expected to achieve. Orders would be subject to parliamentary scrutiny, whereas guidance is not. Therefore, intervention based on orders would relate to criteria which had been passed through parliamentary procedures.

Comparability in this area is one of the cornerstones of our approach to local government: uniformity, however, is not. We want consistency of performance and higher targets, but it is up to local authorities as to how they achieve those targets and the better value regime gives them the opportunity to do that. At the end of the day, local authorities will be judged both by their own electorates, and by the Audit Commission and the Secretary of State as to whether they have met the performance targets set.

Although much of the improvement can be achieved through guidance, I fear that if we remove the references to orders, we remove from the Secretary of State one of the major levers to achieve a genuinely best value regime. I fear that if these amendments were passed those provisions would be seriously diluted.

Lord Dixon-Smith: Shortly after I was asked, or told, to deal with local government in this House, I met the

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Minister in the Prince's Chamber and warned him that I had spent a long time fighting the Government. I found it very difficult when I came to this place because I was then publicly very much more on the same side as my Government and I had to shut up. However, I would find it very easy to continue a battle that I had been fighting for a very long time. Although not always in public, I certainly fought the previous government for many years over the issue of whether it was good to have local government centralised in the way it has been going on.

If one looks at public attitudes to local government, and at the concern felt because of the electorate's lack of interest in matters local governmental--there was the less than 30 per cent poll last week--and if one wonders why, one can say that it is precisely for such reason. The public are very sophisticated--they are not bored and they are not dull and they are not uninterested--but they realise that all the major decisions are taken here, and that what happens at local level is, all too often, on the margins. They think that is a proper measure of their attention to local government. That is why I see this as such a fundamental issue.

I accept that there is a major problem at present, given the huge predominance in local government funding from the centre. Indeed, there will be no solution to the problem of public interest until that issue is resolved. It would certainly stimulate public interest if the electorate had a clear feeling that councillors could genuinely take decisions and that they were genuinely in authority. That view is not widely held at the present time.

I do not apologise for the way I introduced this particular issue today. When we come to the issue of the national interest and indicators, the Minister himself has said they already exist.

As regards ministerial intervention, there is an immense amount already and there will be in the future. However, even if we took it out of this particular clause, it seems that there is sufficient opportunity in other parts of the Bill for the Minister to get back in if he is feeling deserted an left out. I do not really have any concern about that, but I take on board the very serious point that parliamentary orders have parliamentary scrutiny, while guidance does not. I will consider that very carefully before we go any further down this particular road. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.15 p.m.

Lord Dixon-Smith moved Amendment No. 20:

Page 3, line 28, leave out paragraph (b)

The noble Lord said: This amendment flows from what we have just been discussing. In this series of amendments we are simply setting out to remove standards and to retain indicators. It is part of the process of getting back local authority discretion and the ability for local authorities to control properly the provision of services in their own areas. I beg to move.

Lord Whitty: I am grateful for the noble Lord's brevity; it caught me by surprise after his eloquent speech in the previous debate, with which I have some

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sympathy. He is suggesting in this amendment that effectively we should remove the provision for the Secretary of State to specify performance standards. We have felt that we need a number of different measures: performance standards, performance indicators and performance targets. During the previous debate I started to try to define the difference between these and the reason that we need all of them. Perhaps for the record I should say this slightly more fully.

Performance indicators are a measure of an authority's performance, for example the number of hours a particular service is available to users in each day. The Audit Commission has long--as the noble Lord indicated--set such indicators. Where appropriate, performance standards would set out the minimum acceptable level of service provision. For example, a standard might state that a particular service should be available to users for a minimum of eight hours a day. The Government do not intend to specify a large number of new standards, but there are some areas where we consider it is necessary to do so.

A performance target will set out what level of performance the authority needs to achieve within a specified time frame against the performance indicator, for example to increase in the next year the number of hours each day a particular service is available to users from eight hours to nine hours a day. Authorities will set their own targets against the performance indicators in any case.

We need all such measures, although the Secretary of State--or indeed the Welsh Assembly--will specify a relatively small number of performance indicators in order that we can achieve some degree of comparison between the performance of authorities on a number of key issues. At present the Audit Commission specifies over 200 indicators, and we are aiming to specify say 80-100 indicators, which may be supplemented by the Audit Commission. We are not aiming therefore to increase the burden on local authorities as compared with the current regime.

We may also specify a number of performance standards. Those standards would specify the minimum standards which authorities must meet if they are to achieve best value for that service.

The third element is target setting. Clause 4 which we are debating at the moment does not deal with targets, but I thought it was important to place on the record the distinction between those approaches.

These amendments would remove the provision to specify performance standards, and consequently would alter provisions subsequently in Clauses 5 and 6 regarding the carrying out of best value reviews and the preparation of best value performance plans. Where there is a clear national requirement it is our intention that the Secretary of State or the Welsh Assembly will specify the performance standards an authority must meet.

The White Papers indicated that the Government would take a clear lead on this matter, and the Bill makes provision for doing so in relation to standards. The aim is to specify a minimum acceptable level of service in areas where the achievement of particular

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standards is clearly in the national interest. The ability to set and change standards over time will, in our view, be a key driver of improvements. This power will be used only where there is a clear national interest to do so. For example, if the Government set a target for all local authorities to achieve by, say, 2003, the intention is that by 2003 all authorities should be performing at that level. At that point that level of performance may become a minimum standard to ensure that performances do not fall below that level. Future targets would then seek to improve on that standard. In other words, there is a dynamism within this regime continually to improve the performance of local authorities in delivering their services. If one element were to be taken out, which is what the amendments seek to do, that regime would fall and the consequent improvement in standards generated by the new regime would also fail to materialise.

We do not believe that the amendments to delete the provision relating to performance standards would help the objectives of best value or indeed the broader objectives of helping local authorities to deliver services to local people.

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