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Lord Dixon-Smith: I am grateful to the Minister for his reply. I shall study it very carefully to see how much further forward I wish to take the matter. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 21 not moved.]

Baroness Hamwee moved Amendment No. 22:

Page 3, line 33, leave out ("authorities") and insert ("categories of authority")

The noble Baroness said: I shall speak also to Amendments Nos. 38 and 72 which deal with the same issue. For the record, grouped with these amendments are Amendments Nos. 80, 81 and 82 in the name of the noble Lord, Lord Dixon-Smith.

My three amendments deal with the wording of three different clauses. Under Clause 4 the Secretary of State is able, by order, to specify different performance indicators or standards for different functions and for different authorities, which is the issue, and to apply at different times. He has similar abilities under Clause 5 with a review of functions. Under Clause 15, which deals with the modification of enactments and the conferring of new powers, the Secretary of State can similarly make an order making different provision for different cases.

I said earlier this afternoon that it is important that the Government should dispel any whiff of an idea that authorities might be preferred on an improper basis. I am aware that the Government have indicated that, where the Bill refers at a number of points to different authorities, what is meant is different categories of authorities, such as, for example, island authorities, authorities with the functions of, say, a unitary authority, or county authorities, or police authorities, and so on.

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With this group of amendments I am inviting the Government to confirm what they mean when they refer to different authorities in the various clauses. I beg to move.

Lord Dixon-Smith: Amendments Nos. 80, 81 and 82 are grouped with these amendments. Amendment No. 80 refers to page 14, line 36, Amendment No. 81 refers to page 16, line 18 and Amendment No. 82 refers to page 16, line 19. Amendments Nos. 81 and 82 both deal with the question of whether one should be describing single authorities or categories of authorities. That is why we have the grouping.

I was somewhat careless to leave Amendment No. 80 in the same grouping because it might seem to deal with the same issue but in fact it does not. What it actually deals with is accounting standards. Clause 22 deals with accounts. Subsection (1) provides that:

    "The Secretary of State may make regulations about the keeping of accounts by best value authorities". That is fine. However, subsection (2) provides that:

    "The regulations may--

    (a) require accounts and statements of accounts to be prepared, kept and certified in such form or manner as the regulations may specify". They may also,

    "require accounts to be deposited", and

    "require the publication of information about accounts". However, we then come on to,

    "make provision (which may include provision requiring payment)". Subsection (3), which my amendment is dealing with, provides that:

    "The regulations may--

    (a) make provision in relation to best value authorities generally or in relation to one or more particular authorities;

    (b) make different provision for different cases".

We are dealing with public authorities' accounting standards. They are already, and rightly, fairly heavily prescribed so that the accounts are transparent and open and there is a reasonably common standard. In this way, anybody accustomed to looking at local authorities' accounts can look at one set and have some hope of comparing them with another set. Here, however, we have a power to make provision in relation to one or more particular authorities with regard to accounts, or to make different provisions in different cases. I confess to being extremely puzzled about that. I tabled the amendment in order to give the Minister the opportunity to explain why that should be necessary, as I must admit that I am unable to understand it.

Lord Whitty: There is a difference of approach in that the various amendments substantially limit the ability of the Secretary of State to designate particular groups of councils in different ways, except possibly by their normal categorisation as district authorities, county authorities and so forth.

Of course, it is important that all best value authorities should be subject to the same criteria, subject to the same review cycle and subject to reviewing all of their functions over a five-year period as we intend. It is also

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vital, in order that the best value regime can operate effectively, to make provision for authorities to be treated differently. This could be either by different category, as is clearly necessary, because different categories carry out different functions; or by different function, because different levels of authority carry out the same function; or by performance, in that underperforming councils may require particular attention; or by finances, when high spending councils may require particular attention; or by particular circumstances such as island authorities or areas of particular social need.

In my view, it is important that the Secretary of State does retain powers to discriminate in this way. However, that does not mean that the Secretary has open-ended power to pick and choose. There would have to be criteria and a consistency of approach. In relation to the designation of different authorities, authorities can be either categories or individual authorities.

Intervention powers under Clause 15 relate to cases which would include classes of authority. A class may be a category. In this case it would be very difficult to use the clause in relation to an individual authority unless such an authority is genuinely a singular case. In case that explanation is not clear I will convey it in writing.

The effect of Amendment No. 72 would be to restrict the way in which the Secretary of State makes orders under Clause 15. The Bill envisages that the Secretary of State will be able to modify or exclude the application of existing legislation in relation to best value authorities, or confer new powers on those authorities. Those changes would be made through secondary legislation. We think it essential for the Secretary of State to be able to enact legislation which recognises that there are distinct types of authorities and that for each type particular provision would have to be made. That is not picking and choosing; it is defining categories of authority by consistent criteria.

Amendment No. 80, to which the noble Lord referred, relates to accounting. Again, different accounting regimes may be appropriate for different types of best value authorities. Some best value authorities are unique, such as the GLA, the Broads Authority, and there may be others. If Amendment No. 80 were to be accepted on its face value, the same accountancy regulations would apply either to all authorities or to none. On the face of it that would mean that a town council or a parish council would have the same accounting requirements as the GLA. Clearly that is not the intention of the noble Lord and would not be a sensible outcome.

Amendments Nos. 81 and 82 restrict the flexibility of any Secretary of State to issue guidance to different authorities. The Government have to recognise that different authorities carry out different functions at different times. Clause 25(2)(a) allows the Secretary of State to issue guidance to one or more authorities. This means that from time to time he may issue guidance which is addressed to a particular authority. That provision would also allow the Secretary of State to issue guidance to a particular category of authority. The legislation would also allow the Secretary of State to issue a different guidance to different authorities, thereby allowing the degree of flexibility that we consider necessary.

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The acceptance of Amendments Nos. 81 and 82 would ensure that the guidance could not go to an individual authority but only to a category. That is unnecessary technically as the requirement for categories of authority is inherent in the term "one or more particular authorities", and the term "different authorities" would be unnecessarily restrictive in its effect. If a specific authority, or a group of authorities smaller than a category would benefit from additional guidance, it would not be helpful to prevent that guidance being issued.

These amendments therefore greatly restrict the flexibility of the Secretary of State to address particular issues which arise in certain contexts. It would not help the best value regime if guidance and accounting requirements, for example, cannot be differentiated as between massive authorities or authorities carrying out one function and those carrying out others, or indeed, by other criteria.

We would not be happy if any of these amendments were carried. They go to the heart of what is required to improve the performance of particular authorities and categories of authority up to the best standard which is the whole objective of the best value regime. To dilute the Secretary of State's powers in this respect would in our view be a serious dilution of the regime itself.

6.30 p.m.

Lord Dixon-Smith: Before the Minister sits down, I hear what he has to say which interests me greatly. However, I have not ascertained--he can correct me if necessary--whether the Bill makes all existing accountancy practices and regulations redundant and passe. If it does, then I accept what he says; if it does not, I admit that I still have some difficulty.

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