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Baroness Farrington of Ribbleton: Amendment No. 228 would mean that a functional body could be required to give up part of its useable packet of receipts for the benefit of the GLA or another functional body only if it has become free from debt. In fact the power to make such regulations as those in Clause 104 is an important reserve power. We have no immediate plans to make such regulations and it may be that they would never be needed.

Clauses 105 and 106 enable the bodies to redistribute resources voluntarily, subject to the mayor's consent. If these arrangements are used in a co-operative way it

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may never be necessary to invoke the powers. The mayor's power to redistribute capital receipts is subject to a number of safeguards. First, amounts that the mayor directs a functional body to pay to him can only be used to meet the capital expenditure of the GLA or of another functional body. Secondly, the mayor cannot take away from a functional body capital receipts derived from particular disposals of assets. Thirdly, any regulation made by the Secretary of State will contain a number of safeguards to make sure that the power was exercised reasonably.

I must say that I find this amendment unhelpful, and its effect is unclear. It appears to mean that a body could be required to give receipts for redistribution by the mayor only if it was free from debt. This may be intended to require the prior discharge of long-term borrowing rather than all debts. That would need to be made clear. Assuming that that is the intention behind the amendment, it would prevent the mayor from securing the most efficient use of capital receipts across the GLA family, but at the same time it would do nothing to require or encourage the functional bodies to take any steps to discharge their debts.

This amendment could strain the use of any power conferred on the mayor to redistribute the capital receipts of functional bodies, and would certainly make it more difficult to use the power sensibly and effectively. It would probably render it unworkable. I therefore ask the noble Lord to withdraw this amendment.

Lord Dixon-Smith: I am grateful to the Minister for her explanation of the reasons why the Government feel they cannot support these amendments. I shall need to study the answer with great care before deciding whether to take the matter further. There is always a potential for conflict between the interests of the constituent bodies and the authority as a whole, and that is something which we have to face in this Bill and which must be faced by the authority in due course. Our function here is to try to make sure that the process will work as smoothly as possible within the authority. It was with that in mind that the amendment was moved, and I now beg leave to withdraw it.

Amendment, by leave, withdrawn.

Lord Dixon-Smith moved Amendment No. 229:

Page 58, line 26, at end insert--
("( ) The anticipated percentage of the available capital receipts of each functional body that are to be paid to the Authority as specified in subsection (1) above shall be published by the Mayor in the capital spending plan prepared for that body under section 106 below.
( ) The amount paid out of available capital receipts to the Authority by that body during the year shall not exceed or be less than the amount stated in the capital spending plan by more than ten per cent of available capital receipts.").

The noble Lord said: I beg to move Amendment No. 229. This amendment, with Amendments Nos. 230 to 235, appears on the Marshalled List in my name. With the leave of the Committee, I will speak to them all. The Government's proposals give a great deal of discretion: to shift capital receipts from the functional bodies to

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fund capital spending of other bodies within the authority in Clause 104; to make grants for capital spending in Clause 105; and even to make grants for current spending in Clause 106.

While some degree of flexibility is desirable, it seems to me that the amount of flexibility which is permissible under the Bill as drafted is perhaps rather more than is reasonable. In the wrong hands, it could lead to possible abuse by, for example, raiding the capital receipts of one body in favour or projects elsewhere, when the body that was, so to speak, raided was itself in desperate need of capital expenditure. I accept that there is always a judgment to be drawn. To borrow the words of the noble Baroness, Lady Hamwee, we are dealing with one authority and the mayor has to be able to set his priorities. But the authority should be bigger than the mayor. It will in the end be bigger than the mayor and the assembly too. A judgment will always have to be made as to what is responsible financial management. These amendments are directed towards that.

Turning to Amendment No. 233, the Bill as drafted seems to specify a minimum capital grant. The provision relates to grants under Clause 105. The Government's proposal is that the mayor's capital spending plans should set out the minimum amount of grant that the authority is to pay to each functional body for its capital spending in the coming year. To set out a minimum at this stage seems inappropriate. It would be better to set out the estimated amount of the grant rather than the minimum. That would be a tighter definition; it would be less capable of subsequently being, let us say, adjusted unfortunately if a mayor were so inclined.

Amendments Nos. 234 and 235 reinforce the disclosure requirements of the earlier amendments. The first amendment ensures that all the capital spending plans of each functional body should make clear all the funding resources for that functional body's capital spending: not just the capital grants from the authority but also any proposed transfer of capital receipts from other functional bodies. That would increase the transparency of the assembly and, through public access to public spending plans, the understanding of the wider public as to how capital spending was being funded.

The existing government proposal suggests that there should be some disclosure of funding from capital grants, but does not indicate what will come from the transfer of the capital receipts. The amendments are directed towards improving the transparency under which the authority is working.

Baroness Farrington of Ribbleton: This group of amendments would require the mayor to include in the capital spending plan a wide range of additional information about capital grants and the redistribution of capital receipts. That is information that could be given only if at the time when he came to prepare the capital spending plans for the forthcoming financial year the mayor had made, and was in a position to make, firm decisions about the distribution of such resources. Taken together, the amendments would greatly reduce the

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mayor's discretion in allocating capital resources to the functional bodies and they are not acceptable to the Government.

Four of the amendments relate to information in the capital spending plan about redistributed capital receipts. Members of the Committee will be aware from previous debates that Clause 104 gives the Secretary of State power to make regulations under which the mayor would be allowed to redistribute the capital receipts of functional bodies. If such regulations were made, Amendment No. 232 would require the mayor to include in section A of the capital spending plan the amount of capital receipts functional bodies would be expected to pay him or her.

Amendment No. 234 would require the mayor to estimate in section B of the plan the amount of capital receipts he would take away from one functional body and give to another.

The mayor would also be required under Amendment No. 235 to include in the figure for the expenditure that he expects each functional body to meet out of capital grants in Section D the amount he expects them to meet out of redistributed capital receipts and grants paid by the GLA.

Amendment No. 229 would constrain the availability of capital receipts to the mayor under Clause 104 to an amount which does not vary by more than 10 per cent from the amount that he states in the capital spending plan. These amendments would constrain the use of any power conferred on the mayor to redistribute the capital receipts of functional bodies and make it more difficult to use that power in a sensible and effective way.

Under Amendments Nos. 230 and 231 the powers of the GLA and functional bodies to pay capital and revenue grants to each other are similarly intended to be exercisable at any time during the financial year. The need for an exchange of resources between bodies in the GLA family could arise at any time during the financial year. The amendments would prevent and undermine this. I go back to the point made in several contributions by the noble Baroness, Lady Hamwee. These amendments could completely undermine one of the methods by which the Bill promotes the most efficient use of the resources of the GLA and the bodies as a whole. I do not wish to misquote the noble Baroness, who believes that we do not go far enough in this respect.

Finally, Amendment No. 233 would require the mayor to include in Section B a statement of how much capital grant he estimates the GLA will pay to each functional body. The Bill as currently drafted requires the mayor to state the minimum amount. The Government's Amendment No. 232A allows him to specify nothing if he has not reached a decision on that amount. In requiring all such payments to be estimated before the start of the financial year, the amendment cuts down the discretion and financial flexibility that the power is intended to confer. Thus, to reduce the mayor's discretion will disadvantage the functional bodies because the amendments will remove financial flexibility in making available capital resources.

The mayor is to be in a position to help meet the expenditure needs of the functional bodies, which can change during the course of a financial year. He can help by making available grants and helping with the

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redistribution of resources. We believe that it is not cost effective or sensible to have these matters tied down in a plan before the year begins. The amendments would seriously undermine the mayor's discretion and, therefore, cannot be acceptable. I ask the noble Lord to withdraw the amendment.

10.15 p.m.

Lord Dixon-Smith: I am grateful to the noble Baroness for her response, which takes me some way forward. She may well be right in saying that the amendments make it more difficult for the mayor to operate in a sensible and effective way with regard to management of the capital resources of the authority, but I also suggest that they would make it considerably more difficult--this is the intention--for the mayor to act in a rash and less effective way. Every coin has an obverse and reverse. One must always consider that aspect. Nonetheless, I shall consider with care the response of the noble Baroness. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 104 agreed to.

Clause 105 [Capital grants between Authority and functional bodies]:

[Amendment No. 230 not moved.]

Clause 105 agreed to.

Clause 106 [Revenue grants between Authority and functional bodies]:

[Amendment No. 231 not moved.]

Clause 106 agreed to.

Clause 107 [Form and contents of capital spending plan]:

[Amendment No. 232 not moved.]

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