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The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): The noble Baroness said that this goes to the heart of the relation between local and national government; and to some extent it does. However, it would be a novel position to say that national government have no powers of intervention. Yet, in effect, the noble Baroness's Amendment No. 65 would remove entirely the powers of the Secretary of State to intervene directly in an authority which is failing, or to nominate someone to do so on his behalf.

As the noble Lord, Lord Dixon-Smith, said, there are a number of measures short of that and all of those measures would need to be considered over time. Ultimately, though, that is a power which rests with the Government under the Bill, or with the National Assembly for Wales in the case of Wales. If they were removed they would have no power to take over the responsibility for exercising a function on behalf of an authority, nor would they be able to intervene directly in the internal management of that authority, even in the most extreme and difficult cases. That would be a serious undermining of the effectiveness of the Bill.

Although it is true--and I shall repeat it as often as I have to--that those powers would be used sparingly and in the last resort, it is nevertheless also true that Clause 14 in a sense provides the teeth of the Bill and has an effect because of its deterrent value. Without its provisions the duty of best value cannot be effectively enforced in those areas where an authority is evidently failing to deliver services to its electorate. Removal of the subsection would remove power from the Secretary of State to address what would be substantive failings, including serious and long-term systemic failure which, if we are honest, has applied in the past where the authority has itself conspicuously failed to act, despite having been given the opportunity to do so by central Government.

The noble Baroness asked about the criteria. In a sense, reference to substantive failings and serious and long-term failure covers a number of criteria. There are no specific criteria in that sense, but important principles are set out in the protocol which are highly relevant. They include principles in relation to the process which provides that local authorities should normally be given opportunities to put things right themselves, except in cases of extreme urgency which is the so-called fast-track procedure with which we shall be dealing later.

The powers contained in Clause 14(5) would not only be exercised only rarely; they would also be exercised only after options under the previous

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provision, Clause 14(2), had been fully explored. Those powers are very much in keeping with the White Paper commitment for responsibility to be transferred to any authority or a third party in cases of serious service failure. The Government recognise that those powers in Clause 14(5) are strong and substantive. They is why they will be used only to tackle cases where the severity of the failure merits the use of those powers. In our view, it is unlikely that this will include more than a handful of cases, but such cases need to be addressed and the Secretary of State needs to have a full range of intervention powers to do so.

The noble Baroness asked, in the case of designating a nominee, what were the duties of the nominee in relation to best value. In a sense, the question is answered by asking what a nominee would be brought in to do. The answer is: to address the conspicuous failings of the authority itself to address objectives of best value. Therefore it means that the nominee would be subject to all aspects of the best value framework.

The second amendment in this group seeks to make provision for representatives of best value authorities, and not just for authorities themselves, to make representations about the report on which the intervention is based and about the direction proposed before the Secretary of State is permitted to issue a direction under Clause 14.

We dealt with the issue of representatives of local authorities in another context on earlier clauses. The Government are committed to working with best value authorities and their representatives. That is why the Bill provides best value authorities themselves with the opportunity to make representations about reports which provide the trigger for intervention and about any direction issued under the clause, with the exception of the most urgent of cases.

Moreover, noble Lords will be aware of--indeed the noble Baroness has referred to--the protocol intervention which we are in the process of agreeing with the Local Government Association under the Framework for Central Local Partnership. That protocol will set out the principles underpinning intervention and the broad procedures to be followed. It will contain a section on the role of the Local Government Association in any intervention.

Noble Lords have access to a draft of the protocol, which has also been sent to the Delegated Powers and Deregulation Committee. It is therefore clear that the LGA, or where appropriate other associations of best value authorities, will be very much involved in that process. The Welsh Office is developing separately with Welsh Local Government Association a similar protocol for intervention. I understand that the Home Secretary and the Association of Police Authorities are moving along the same lines. In addition, the new improvement and development agency, will provide a supportive role in assisting authorities in achieving continuous improvement.

The protocol will set out how representatives of best value authorities will be involved in the process of intervention--the approach will need to be flexible over time as we learn from this process--and will give them

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a clear role. Therefore, I do not consider Amendment No. 66 to be necessary and I hope that the noble Baroness will not press it.

Amendment No. 67 is bizarre. It would require that any direction issued under Clause 14 must first have secured the approval of the relevant Select Committee--I assume of another place. I suspect that this stems from a slight misunderstanding, not only of the purpose of this provision, but also of the role of Select Committees. The fact is that Select Committees do not usually scrutinise individual directions. Indeed, they rarely go to that level of scrutiny and it is not generally regarded as their job. If the amendment were adopted, it would represent a significant change in a Select Committee's powers.

The noble Baroness, Lady Maddock, seems to think that she can offer a precedent, of which no doubt she will inform us.

Baroness Maddock: I agree with the noble Lord.

3.45 p.m.

Lord Whitty: I thank the noble Baroness. That raises one of the constitutional points that will possibly be dealt with in the context of this Bill.

Your Lordships will be aware that Clause 14 contains a whole range of intervention powers, from the more technical powers contained in Clause 14(2), to the more extensive powers in Clause 14(5). It would be inappropriate for the Secretary of State to require the approval of a Select Committee before he could direct an authority under Clause 14(2)(a) simply to amend a performance plan. Even for the more extensive powers under Clause 14(5), it would still require a major constitutional change in the role of Select Committees. It could also impose unnecessary time constraints on the process of intervention. Therefore, I do not think that the involvement of Select Committees in this process--at least at the present stage of development of the role of Select Committees--would be appropriate. I trust that that amendment will not be pressed.

Perhaps I may crave the Committee's indulgence. I wish to put on record another issue relating to Clause 14(5) which is currently under consideration. The Government intend to bring forward further amendments for consideration at the next stage in order to ensure that the provisions relating to the powers of the Secretary of State and the National Assembly for Wales to intervene in failing authorities are as clear as possible.

We propose to bring forward amendments to clarify the Secretary of State's powers in Clause 14(2) and Clause 14(5) and their relationship to existing legal provisions. That would have the effect of ensuring that the intervention process is both fair and flexible. They would fundamentally be technical amendments, and would not in any sense further extend the powers of the Secretary of State or the National Assembly for Wales to intervene over and above the provisions already in the draft Bill. Their aim would be to clarify how the powers currently set out in the Bill would operate and ensure that they could be used effectively.

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Additional amendments to Clause 14 may be necessary at a later stage to address potential inconsistencies between the best value regime and other legislation where the Secretary of State or his nominee takes over the functions of an authority. We have identified a number of cases in which a conflict or inconsistencies may arise. The most obvious relates to the Secretary of State's role in the appeals system as provided for under planning law. We shall need to bring forward an amendment to clarify that position. I merely place that intention on the record at this stage. In the light of those remarks, I ask the noble Baroness to withdraw the amendment.

Baroness Hamwee: I hope that the Government will be prepared slightly to expand the amendments that they intend to bring forward; clarity will certainly be welcome. The noble Lord used words that were not unexpected. He referred to authorities which are "evidently failing to deliver". He used phrases like "substantial and serious long-term failure", and said that the powers under Clause 14(5) would be applied only after Clause 14(2) had been fully explored. I said that was not unexpected. However, I should like to see a further reference on the face of the Bill which would "rein in" an over-ambitious Secretary of State. One must always think in terms of future Secretaries of State--for example, three governments on--and not necessarily the current Secretary of State.

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