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Lord Whitty: I have noted noble Lords' intention to return to this matter.

10 May 1999 : Column CWH50

Baroness Hamwee: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 25 to 31 not moved.]

Baroness Hamwee moved Amendment No. 32:

Page 3, line 41, at end insert--
("( ) shall aim to enable each authority to set its own objectives in relation to the exercise of its functions, and")

The noble Baroness said: Clause 4(4)(a) does not permit much variation. This amendment proposes adding an objective that the Secretary of State,

    "shall aim to enable each authority to set its own objectives in relation to the exercise of its functions". Clearly, the Secretary of State must have regard to the promotion of improvement because if continuous improvement is to be achieved that will be central. However, Clause 4(4)(a) does not on the face of it permit much local variation. I have said already this afternoon that, in my view, it is always necessary for an authority to set priorities in what it does because that is part of the political function. But the centralisation that is inherent here, or at least is in danger of applying--if I can be less pessimistic about it--could well be stifling. We have talked before about promoting local innovation or in any event activities which may not justify quite such a grand term as "innovation" but take forward new ways of doing things. It must be recognised that authorities should have the right occasionally to make mistakes, because they will not move forward unless they are able to make the occasional mistake. That is a fact of life.

I hope that we can have an acknowledgement from the Government that the specifications referred to in the clause do not mean uniformity. I beg to move.

Lord Whitty: I agree with most of what the noble Baroness has said, but I do not regard the amendment as necessary. The Government will specify where it is in the national interest to do so, but that should not inhibit local authorities setting their own performance targets and objectives. Nothing in the legislation restricts them from doing so. We will consult on national targets but local authorities can set their own targets. The amendment is therefore unnecessary.

Baroness Hamwee: I shall have to be content with that, which is not to impugn the Minister at all. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 33 not moved.]

Baroness Hamwee moved Amendment No. 34:

Page 4, line 3, leave out ("must") and insert ("shall substantially")

The noble Baroness said: I shall speak also to Amendment No. 35. We are dealing with Clause 4. Subsection (5) provides:

    "In exercising a function a best value authority must meet any applicable performance standard specified".

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    The first of my amendments proposes that the authority must "substantially" meet the applicable performance standard. The amendment enables me to ask the Minister what are the consequences if an authority falls short by a small amount and, in particular, whether that shortfall would give a right of action to a member of the public--no doubt a council taxpayer--against the authority. That is the question asked on the back of Amendment No. 34.

Amendment No. 35 proposes that the authority's duty is to meet a performance standard

    "so far as it is reasonably able". There will be a range of factors which could make meeting a standard reasonable or which might indeed lead to failure to meet another standard. I do not have in mind only, or even particularly, having the funds available to reach a particular standard. Possibly the availability of staff qualified in different areas would be an issue. There might be a difficulty in recruiting at a certain time. Or a contractor contracted by the authority might itself fail; for instance, a refuse collection company might breach its contract with the authority or it might go bust. There would be a period in which the authority would be seeking to retrieve the situation and, as between the authority and the contractor, would be addressing the consequences of the breach of contract. If this is a series of minor breaches, the authority would require the contractor to remedy them in the usual way of a contract. Such a remedy, or retrieving the situation, cannot be applied similarly vis-a-vis the public and I am concerned, again, as to what the implications are for the authority if it behaves entirely sensibly in the sort of situation which I have outlined. It is a serious point to understand precisely what are the implications of Clause 4(5). I beg to move.

Lord Whitty: As regards the question raised by the noble Baroness as to whether an individual could take action, our legal advice is that it would be difficult, though not absolutely impossible, for an individual challenge to succeed. The applicant would have to demonstrate individual harm to himself or herself over and above that to anyone else, which may be a difficult proof to establish.

The example was raised of reacting substantively to failure, and, in terms of qualifying the requirement of local authorities to meet the standard, whether we could say that such a case should downgrade the effect of that requirement. I have spelt out previously the need for continuously setting targets for standards in order to improve the performance of local government. If we were to provide reasons for local authorities to argue that they should not be able to meet those standards, the effectiveness of those standards would decline.

I indicated earlier that we would have only a minimal number of minimum standards and that we would not be setting national standards right across the board but that we would expect local authorities to achieve various standards. Performance standards when specified would need to be met by all authorities and, without that requirement, performance standards would have significantly less potential to improve the delivery of

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key services to local people. Therefore, I do not accept the arguments advanced by the noble Baroness that we should dilute the effect of those standards.

Baroness Hamwee: I did not seek to dilute the effect of the standards but to protect authorities from possibly frivolous, time-consuming, expensive and difficult actions. I should like to consider the matter further and perhaps take advice on it, having heard the Minister say that it would be difficult, but not impossible, for an individual to take action. In saying that, I am not suggesting that individuals should not have proper rights to take action against an authority, but there is a balance to be struck here. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 35 not moved.]

Clause 4 agreed to.

Clause 5 [Best value reviews]:

Lord Dixon-Smith moved Amendment No. 36:

Page 4, line 8, at beginning insert ("Where the Secretary of State is satisfied that a best value authority is failing to fulfil its duty to obtain best value,")

The noble Lord said: The amendment seeks to change Clause 5 from being a general clause, whereby the Secretary of State can make orders that will affect all or some authorities, to one which might affect one authority at a time. The amendment to Clause 5(2) provides that:

    "Where the Secretary of State is satisfied that a best value authority is failing to fulfil its duty to obtain best value". I accept that best value is a new duty and it will indeed impose restraints on local authorities. Local authorities have been reviewing their services for years. When I was involved in local government, large parts of the authority were always under review to see how those services could be improved. It would appear to be extremely doubtful, however, whether any one order in this instance could fit either one authority or one group of authorities, let alone local authorities generally, to require them to review all their services, if that job is to be done properly.

If best value is genuinely to be extracted, these studies take a considerable amount of time. They require a great deal of detailed work on what is already happening. One needs to refer to what is going on elsewhere, to see where and how improvements might be achieved and this, in itself, is a burden that already exists. When I read this clause I thought that dealing with the matter in a somewhat general way was possibly a little over the top. I have already admitted to being old-fashioned and my view of local authorities is that local government, certainly--and I suspect best value authorities, because police and fire authorities are also already doing it--are entirely familiar with this business of reviewing services to see how they can be better fulfilled. They do not, therefore, need to be told specifically or directed to do this.

On the other hand, there is the occasional authority which does slip up. It seems entirely appropriate that, if an authority does slip up, the Secretary of State should

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have power to tell it to move and do what it ought to be doing. That would be the effect of the amendment that I have proposed. I beg to move.

7 p.m.

Baroness Farrington of Ribbleton: Amendment No. 36 seeks, as the noble Lord says, to restrict the powers of the Secretary of State to specify a time period within which best value authorities have to review all their functions to cover only those best value authorities that he judges to be failing in their duty to obtain best value. This amendment would undermine the policy objectives of best value. All authorities must have regard to the general nature of the duty of best value as described in Clause 3. This contains an important element, namely to make arrangements to secure continuous improvement. Whether or not the Secretary of State is satisfied that a best value authority is currently meeting its duty to obtain best value is, therefore, something of a red herring. Best value reviews are a vital part of the process of securing continuous improvement, identifying the improvements we are seeking from local authorities. They will involve challenging the ways in which, and the level at which, the function is being exercised; comparing performance with other authorities and bodies; consulting local communities and assessing competitiveness. Such rigorous reviews should allow an authority to secure efficiencies through such means as greater economies of scale, partnerships in service delivery, reorganisation and better processes.

It is our intention that best value authorities should fundamentally review all their functions over a certain period--probably five years--to ensure continuous improvements are made, not just where there are serious shortcomings. This will enable targets for improving performance to be set and improvements brought about at an early stage. We can do this only if proper comparisons are made between authorities on a common basis. If a requirement is laid down on local government generally as to the period in which reviews are required to be completed, we do not want to wait for best value authorities to fail before they undertake such a review. We rather intend the review to be part of the process which, I quite genuinely admit, is a system which is adopted internally within many good local authorities now. We intend to prevent failure among those authorities whose performance can be improved.

We also made it clear in the interim guidance published in April, and elsewhere, that local authorities will be expected to explore the extent to which reviews can tackle a number of related services with a common customer focus or theme. Very often, some of those services will not be failing and the constraints which Amendment No. 36 would impose would prevent that kind of holistic approach. The noble Lord is from the party which, in government, introduced CCT. It is still occasionally argued that the Government, in introducing best value, are not being stringent enough in terms of the interests of the consumer.

In the light of my assurance and explanation, I hope that the noble Lord will feel able to withdraw his amendment. Early evidence is that authorities need to

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be part of a process that will enable them to make valid comparisons with other authorities and to work co-operatively with government.

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