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Local Government Bill

6.29 p.m.

Report received.

Clause 1 [Best value authorities]:

Baroness Hamwee moved Amendment No. 1:

Page 2, line 18, at end insert--
("( ) No authority or body which budgets in any year to spend a sum not exceeding £500,000 or such higher sum as the Secretary of State may by order specify shall be regarded as a best value authority.").

The noble Baroness said: My Lords, Amendment No. 1 seeks to amend Clause 1. That clause is concerned with those authorities that are to be regarded as best value authorities. We had a debate at the previous stage on a de minimis provision. It appears to be generally accepted that a budget threshold of £500,000 a year is about the right sum. The Minister at that stage said that the Government were still considering the figure, although he informed the Committee that discussions with the National Association of Local Councils (town and parish) indicated that £500,000 was the right figure.

I have tabled this amendment in part to ask the Government whether further progress has been made in those discussions and in part because at the previous stage there was some little concern that the amendment as drawn--the noble Lord, Lord Dixon-Smith, moved the amendment and we supported it--did not allow flexibility. If that was the objection--I suspect that it was not the only one, but doubtless we shall hear from the Minister--I hope that I have dealt with it in the present drafting. If the Minister tells the House that he wants to allow for a lower limit than £500,000 we shall happily return to this matter yet again at the next stage. My point is as brief as that. Given the lateness in starting these proceedings, I shall not expand on the background to the amendment. I beg to move.

Lord Dixon-Smith: My Lords, when we debated this issue in Grand Committee the Minister in his response indicated that it would not be normal practice to put into legislation figures that might require subsequent adjustment in the light of inflation. I accept that that is a reasonable argument, but that was never the intended basis on which I moved the amendment. If I did not then make the matter sufficiently clear, or press it hard enough, I am in error. I always envisaged that it might be possible, in the light of experience in a year or two, that the limit now proposed--I believe that we

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should put as much on to the face of the Bill as possible, whatever may have been the custom and practice--would be unreasonably low.

The decision might be taken in the light of practice that £1 million was a perfectly acceptable figure, and that would have nothing to do with an inflationary increase. It seems to me that if we are considering the matter on that scale it is not unreasonable to see that on the face of the Bill. At that level a greater number of authorities would undoubtedly come within the exempt category, but in overall expenditure terms that would be very small beer in relation to the totality of local government expenditure. That would still be controlled by Part I of the Bill, which is concerned with best value authorities. I support the amendment.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, the Government have recognised throughout that the best value duties could be extremely onerous for smaller parish and town councils. The Bill therefore enables us to exempt them. This subsection gives the necessary powers. "Specified description" in this context may refer, for example, to parish councils with budgeted income of a particular amount. As the noble Baroness said, officials have met the National Association of Local Councils and the Audit Commission to discuss how best value can be applied. I confirm that it is the intention of the Government to set a de minimis level of £500,000, as indicated in the White Paper last year. On that basis, approximately 70 or 80 parish and town councils out of a total of 8,000 would be covered by that regime. Any parish council with a lower income would be entirely exempt, although we would like it to follow the spirit of best value.

For those few parishes above the threshold we can use the powers provided in the Bill to ensure that the duties are applied sensibly with regard to a parish's ability to fulfil those duties. We do not wish to impose excessive burdens on those best value parish councils. We shall be consulting on that matter.

We do not think that it is sensible to put a figure on the de minimis level on the face of the Bill because that will remove the capacity to alter the level up or down in the light of changing circumstances and seeing how it applies. Setting a figure by order provides us with the flexibility that we need. The amendment gives us the flexibility to raise the threshold but it would not provide the flexibility to lower it. Were we to take the noble Lord's advice and go to £1 million, next year or the year after we might find that that turned out to be too high and we wished to lower it.

There is an additional problem. The amendment as drafted does not achieve our intention as discussed with parish councils, since we propose to set the threshold with reference to budgeted income in line with existing audit thresholds rather than budgeted expenditure as the amendment provides. With that reaffirmation of our intention and the reason why we seek this flexibility, I ask the noble Baroness to withdraw the amendment.

Baroness Hamwee: My Lords, I am grateful to the Minister for the information with which he has provided

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the House. If the discussions with the parish councils have been related to budget income rather than expenditure I do not wish this amendment to be applied. I do not want to upset those discussions. The Minister referred to lowering the threshold. I do not believe that my amendment would preclude coming back to £500,000 or a slightly higher figure had it gone by order to, say, £1 million. It certainly would preclude coming back to £300,000. I said that if the Government suggested they might want to lower the limit we could be tempted to return to the matter at Third Reading. We shall wait and see. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 [The general duty]:

Baroness Hamwee moved Amendment No. 2:

Page 3, line 6, leave out ("and").

The noble Baroness said: My Lords, in moving Amendment No. 2 I should like to speak also to Amendments Nos. 3, 11 and 12. These amendments deal with the criteria that apply both to the best value duty in Clause 3 and the performance indicators and standards in Clause 4. The clauses explain that the criteria to which authorities are to have regard are, in combination, economy, efficiency and effectiveness. "Economy" probably speaks for itself, as do the other two. However, it may be worth pausing for a moment to reflect on their precise meaning. I believe that "efficiency" is about producing the desired result with the minimum wasted effort, and "effectiveness" is about bringing about a result. Neither of those is entirely original. I looked them up in the Oxford English Dictionary last night.

We do not believe that those are adequate criteria. We do not challenge their inclusion but seek to add to them. This group of amendments seeks to add the criterion of fairness. At Committee stage we spent a little time on whether the term used then--"equity"--was the right one. The Minister volunteered that he preferred "fairness", perhaps simply as a matter of elegance of language; I am not sure. I noted his criticism about switching between "equity" and "equality" in a rather seamless fashion, and I accept that there are differences. I believe that fairness is a good, plain and straightforward term. It embodies concepts of being just and equitable and of providing an equal chance of success. There was quite a lot of support in the Grand Committee for the concept of equity, as it was referred to then. It was regarded as being integral to the best value duty. The Minister argued then that there were difficulties in writing equity or fairness into the criteria as distinct from ensuring the concept of the criterion under the effectiveness banner.

On 10th May the Minister said that the Government,

    "have not thought it appropriate to write in wellbeing provisions. [The Bill] 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".

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    He went on to say,

    "The Government consider it essential that as a result of introducing best value, our local authorities concentrate on service outputs and outcomes".--[Official Report, 10/5/99; col. CWH 22.]

Our concern is that effectiveness may not be interpreted as being capable of including fairness. If fairness is outside economy, efficiency and effectiveness, then guidance, which it was suggested would deal with fairness, cannot bring fairness within it. I accept that there are a number of occasions where guidance can be used to expand on a matter, but if the primary legislation does not allow for it then I would be worried that guidance could not properly provide for it.

We on these Benches are not alone in believing that the promotion of the well-being of one's community in which fairness is absolutely central is the most important part of local government. I believe that the noble Lord, Lord Dixon-Smith, said that promoting the well-being of one's community was the only reason for being involved in a local authority in the first place. I am sure that at a personal level there are a number of noble Lords in the Chamber at the moment who have been--and some still are--in local government. I believe that most of us would identify with that.

I mentioned the Minister's point about outcomes rather than process. But we do not believe that it is possible to separate process and outcome quite as easily as the noble Lord's speech suggested. However, even if one accepts that best value is only about outcomes, we say that fairness is an outcome that a local authority should seek to achieve. We are not arguing that it should take priority over the criteria set out in the Bill, but we believe that it should have at least equality with them.

The anxieties about fairness are dealt with in other constitutional legislation. Understandably it is extensively dealt with in the Northern Ireland legislation. It is also dealt with in the recent Welsh legislation. Therefore, I do not believe that it would be out of place in this Bill.

Economy, efficiency and effectiveness are terms with which local government has lived for quite some time now. I believe that they carry the baggage of referring fairly narrowly to financial concerns. The reports that one sees from the Audit Commission are substantially concerned with financial matters. Looking at performance indicators where the Audit Commission is involved, they certainly have a distinct financial flavour.

The Minister may tell me tonight that this amendment is not necessary. Perhaps the rather trite response to that is to ask what is the harm in it. I believe that there is a message that one wants to give as regards the whole modernisation programme for local government concerning fairness being very important and absolutely central. Sadly, it is a current issue. I have not described the different areas of gender equality, social justice and so on that come within it, but I would like to mention one point, which is racial equality. The Macpherson Report concerning the inquiry into the death of Stephen Lawrence and what happened afterwards recommended that the police service, local government and the relevant agencies should specifically consider implementing community and local initiatives aimed at

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promoting cultural diversity and addressing racism. There is also a need for focused, consistent support for such initiatives. This and the other amendments within the group are squarely within that spirit.

Notions of economy, efficiency and effectiveness have now been applied in local government and elsewhere for more than a decade and a half. As I have said, I believe that they are generally regarded as being financial. If the Minister can assure me that they are wider than that I shall listen to that with care. But I am particularly concerned as to how local authorities, those scrutinising them, the wider community and if necessary the courts interpret the term "effectiveness" and whether fairness can be encompassed by what we have on the face of the Bill. I beg to move.

6.45 p.m.

Baroness Miller of Chilthorne Domer: My Lords, my noble friend has put so well why we are trying to move away, as the Government are, from the ethos of CCT and develop a way of thinking which is removed from that. After the Grand Committee stage I spent some time mulling over the point of outcomes, process and so on. I went back to the fact that the aim of this Bill is to promote improvement in the way that functions are exercised. The Minister's statement during the Grand Committee was that fair access to services could be regarded as being equity under another name.

Having researched the matter a little more, without including fairness--I agree that we should decide on one term that is going to be used and fairness seems to be a good one--on the face of the Bill we shall have continual misunderstanding about it not only from the local authorities involved but also from those who are supposed to measure outcomes, such as the Audit Commission, and those who are supposed to give guidance.

I would like to give a brief example. It comes from development control, which is usually one of the most contentious areas. I believe that the example shows that it is not just a question of fairness as to whether people feel able to take up that service or have access to it, but about the very design of the service. The example comes from a letter from the Department of the Environment, Transport and the Regions dated 19th February. It was checking on how people felt about the various indicators. The letter states:

    "Under the fair access indicators this category of indicator is concerned with the ease of gaining access to particular services both physically and by having readily comprehensible and usable procedures. We are not required to have a best value indicator under all five headings. Our initial view is that this aspect of the planning service may not warrant a whole indicator. Instead we suggest that fair access be addressed within the proposed quality check list". I believe that as that is one of the most contentious of services it deserves the most scrutiny. If that is the feeling about fair access for that service, I do not believe that it augurs well for the rest.

It is not just a question of whether people can understand the notices about development control, or feel able to put their cases well at meetings. It is also a question of the way the service is designed within the

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authority and its ethos of fairness. If one is articulate, it is easy to put one's case well. Unless we include "fairness" within the Bill, specific services will suffer.

I do not believe that community planning will be the answer overall. By their nature, communities have articulate people as well as those individuals who do not know how to use the system and are inarticulate. Sometimes that inability to express oneself may be exploited by an authority should it not wish to hear the other side of the argument.

I support my noble friend. I hope that the Minister will reconsider the view that it is unnecessary to write "fairness" into the Bill. The situation cannot be addressed simply by indicators.

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