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Lord Dixon-Smith moved Amendment No. 318:

Page 59, line 44, at end insert (“provided that no such payment may be directed to be made by a body until that body's debts have been fully repaid").

The noble Lord said: My Lords, Amendment No. 318 is grouped together with Amendments Nos. 319 to 326. They are all related to transparency, accuracy and accountability in relation to the capital expenditure programmes of the Greater London Authority.

Amendment No. 318 requires that capital debts of functional bodies should be paid off before capital receipts are transferred away from them. Amendment No. 319 requires that the available capital receipts be published in the Greater London Authority's budget. Amendment No. 320 requires grants between functional bodies to be published in the budget. Amendment No. 321 requires revenue grants to be specified in the component budget. Amendment No. 322 requires any transfers from the functional bodies to be added to and included in the capital spending plans. Amendment No. 323 requires the word “minimum" to be changed to “estimated" so that there is greater precision in the clause to which that relates. Amendment No. 324 is directed to the same purpose. Amendment No. 325 deals with the definition of the capital spending plan.

Amendment No. 326 is important because it deals with the comparison of performance on the capital spending programme year on year and, more importantly, the consequences of variations in capital spending year on year. Anybody who has had the experience of managing the capital programme of a large local authority--the Greater London Authority will certainly be a large local authority--knows that capital expenditure in its intimate detail is almost uncontrollable. There are many good reasons for that.

Capital spending programmes rely on access to sites which have to be purchased. That may be assumed to take only two or three months. It can often take much longer and difficulties then arise. The reverse also happens. One project in a plan is delayed and another project comes forward and is accelerated. The day-to-day management of all that is extremely difficult. Amendment No. 326 says that that should be looked at and recorded and, if there is an overspend in one year, it should be set out so that it is apparent what the consequences of that may be in any subsequent year.

This is an important group of amendments which significantly improve the Bill. I beg to move.

Lord Whitty: My Lords, similar amendments were tabled at Committee stage. This group of amendments would mean that a functional body could be required to give up part of its usable assets only if it had become debt-free. They would require the mayor to include in the capital spending plan a wide range of additional information.

Taken together, the amendments would greatly reduce the mayor's discretion in allocating capital resources to functional bodies and restrict the

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mayor's ability to take decisions on the allocation of resources in the year. They are therefore not acceptable to the Government. We require that flexibility for the mayor. The additional information required in the amendments would require the mayor to include in the plan information which could be given only if, at the time when he came to prepare the capital spend for the forthcoming financial year, he had made and was in a position to make firm decisions about the distribution of such resources.

The amendments would constrain the use of any power conferred on the mayor to redistribute the capital receipts of functional bodies, particularly Amendments Nos. 318 to 326. They would greatly reduce the mayor's discretion to manage the total resources of the authority and its functional bodies in a sensible way. They would disadvantage the functional body because they would remove that flexibility. The mayor needs to be in a position to help to meet the expenditure needs of the functional bodies which can change during the course of a financial year, as the noble Lord will acknowledge, by making grants available and helping with the redistribution of resources. They are not matters to be tied down in a plan before the financial year begins and would unnecessarily constrain the allocation of resources within the new authority. I hope therefore that the noble Lord will not press them.

Lord Dixon-Smith: My Lords, it is difficult to say that I am grateful to the Minister for what is a disappointing reply, but I am not surprised by it. I shall study what the Minister said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 319 not moved.]

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

[Amendment No. 320 not moved.]

Clause 107 [Revenue grants between Authority and functional bodies]:

[Amendment No. 321 not moved.]

Clause 108 [Form and contents]:

[Amendments Nos. 323 to 326 not moved.]

Clause 109 [Preparation]:

[Amendments Nos. 327 to 329 not moved.]

Clause 113 [Proper financial administration and chief finance officer]:

Baroness Farrington of Ribbleton moved Amendment No. 330:

Page 65, line 2, at end insert--
(“( ) No person may be the chief finance officer of two or more relevant authorities at the same time.").

The noble Baroness said: My Lords, this group of amendments clarifies the arrangements for appointing chief finance officers for the GLA and functional bodies. I shall take each amendment in turn.

Amendment No. 330 provides that no one individual simultaneously may be the chief finance officer of the GLA and a functional body or of two or

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more functional bodies. This is needed to make absolutely certain that the GLA and functional bodies do not share chief finance officers. It is one of the key principles of the GLA finance system that each body is responsible for managing its own financial affairs once the GLA's consolidated budget has been set. Allowing the bodies to share chief finance officers would undermine that principle and could give rise to potential conflicts of interest.

Amendments Nos. 331 and 332 provide that the assembly appoints the GLA's chief finance officer and that the officer is designated from a member of staff appointed by the assembly rather than from staff appointed by the mayor. It has always been the intention that the assembly should appoint all three of the GLA's statutory officers, including its chief finance officer, after consultation with the mayor. Without the amendment, the function of making the appointment would, by default, have fallen to the mayor.

Amendment No. 333 prohibits the mayor from being designated as the chief finance officer of TfL, though it allows TfL to appoint one of its members as chief finance officer rather than a member of staff. As the mayor may decide to chair TfL, he or she could be appointed as the body's chief finance officer. That would cause an unacceptable conflict of interest, given the mayor's policy responsibilities for transport and powers of direction over TfL and the chief finance officer's duty to ensure proper financial administration. The amendments tidy the provisions to appoint chief finance officers of the GLA and functional bodies to ensure that they give full effect to our intentions. I beg to move.

Lord Mishcon: My Lords, perhaps I may be permitted to ask what is apparent even to me is a silly question. Does it mean that a person could be a chief finance officer of one authority and a deputy chief finance officer of another?

3.30 p.m.

Baroness Hamwee: My Lords, perhaps I may add to the list of questions. I would not for a moment argue with the amendments which have been proposed; indeed, I think they are entirely right. It had not occurred to me that they were necessary. However, Amendment No. 333 gave me pause for thought. This is the amendment which provides that the mayor must not be the chief finance officer of TfL. Can the Minister confirm that, when one reads together the various provisions of the Bill, there is no functional body--or the authority itself--of which the mayor may be chief finance officer? In other words, can she confirm that this was a mopping-up provision and is not exceptional?

Baroness Farrington of Ribbleton: My Lords, in answer to the question from the noble Baroness, I believe I can confirm that the mayor cannot do so. That is my understanding of the situation. In answer to his question, I can tell my noble friend Lord

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Mishcon that I believe that the answer is no. However, I shall of course confirm that as soon as I am in a position to do so.

On Question, amendment agreed to.

Baroness Farrington of Ribbleton moved Amendments Nos. 331 to 334:

Page 65, line 6, at end insert--
(“( ) The chief finance officer of the Authority must be a member of staff appointed under section 56(2) above.").
Page 65, line 6, at end insert--
(“( ) The function of appointing the Authority's chief finance officer under subsection (2)(b) above shall be a function of the Authority which is exercisable on behalf of the Authority by the Assembly after consultation with the Mayor.").
Page 65, line 6, at end insert--
(“( ) If the Mayor is a member of Transport for London, he must not be its chief finance officer.").
Page 65, line 6, at end insert--
(“( ) In section 2 of the Local Government and Housing Act 1989 (politically restricted posts) in subsection (6)(d) (the effect of which is that the chief finance officer appointed under certain provisions is included among “the chief statutory officers" for the purposes of that section) after “section 112 of the Local Government Finance Act 1988" there shall be inserted “, section 113(2) of the Greater London Authority Act 1999".").

On Question, amendments agreed to.

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