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Baroness Hanham: My Lords, my noble friend Lord Hanningfield described to the House the feeling of members of his council about the introduction of this new system. He is not alone. Many other councillors up and down the country, where the flirtation has already taken place with the executives, are, if I can put it no higher, utterly brassed off with the whole situation. They are brassed off, despite what the noble Lord, Lord Filkin, said, because they do not have a meaningful role to play. Eight or 10 of them are having a marvellous time. They are making the decisions, spending the money, and being excessively well paid for doing the job and for carrying the burden of the council on their shoulders.

It does not matter about the others. Whatever one says about scrutiny--and I have no difficulty with decisions being scrutinised--under this proposed system there is still no role in decision-making for the majority of members of a council. They are not part of the decision-making process.

The noble Lord, Lord Filkin, mocked the fact that decisions used to be taken in private and behind closed doors. I challenge that. There have always been some perfectly atrocious councils, and I am glad to say that most of them have not been in my party. There have been some atrocious councils where things have gone wrong but, by and large, all decisions must be taken in the open. Some say that when decisions are taken everyone is put under a whip and must do what they are told. However, many decisions have been overturned because they have been taken in public. The public have access to meetings and councillors who are elected to represent their members have the right to take decisions in the open.

What will happen if we do not allow that type of flexibility? No one on this side of the House is asking that the executive system should be abandoned. We

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are asking for councils to have the flexibility to decide whether they want to commit to, or continue with, a committee system whereby the responsibility for decisions lies on the shoulders of all members of the council. We are asking for that to be an option. I believe that it is inescapable that there will be a role for scrutiny within that option. We are asking for the option of a committee system, or something similar, to remain for councils which wish to go forward with that system.

That does not seem to me to be a tremendous concession for the Government to make. They have sold their scheme of executives and mayors to a number of authorities. However, I believe that what undermines the whole situation is the fact that so many of their own labour councillors do not like it. I am sure that I am not the only person to have received a letter from some of those Labour councillors saying that they do not like it and that they are not part of the council. They believe, as do I, that if this system goes ahead without including another option, the next thing that we discuss in this Chamber and elsewhere will be the reduction in the number of councillors who represent any community. For, peradventure, there will not be enough jobs for them to do and, peradventure, they will not want to stay or offer themselves for service to their communities.

I believe that at this stage it is sad that once again we are having to debate this issue. I am somewhat demoralised that the Liberal Democrat Party, which stood so firmly, shoulder to shoulder, with us, as did the Cross-Benchers, having believed that this was a matter of principle as well as a matter of concern, should have decided that there are other ways of achieving an end. It is not an end which I want; nor do I believe that it is one that either my noble friend Lord Dixon-Smith or Members of this side of the House want. Therefore, I support the amendment of my noble friend Lord Dixon-Smith.

Lord Tope: My Lords, the noble Lord, Lord Hanningfield, cast some doubt on the position of the Local Government Association. I want to record that I received a letter today from the chairman of the Local Government Association, Councillor Sir Jeremy Beecham, as, I imagine, did many other noble Lords. In it he says:

    "I am writing to you to express the Association's support for the Baroness's"--

that is, my noble friend Lady Hamwee--

    "proposals and hope that you too will support them (although I do need to say that the LGA Conservative Group is not in support). I believe that through existing provisions, namely Section 10(5) which provides for other forms of executive, and the Baroness's amendments, the Bill now adequately provides for the flexibility that local government and many other supporters of local government like yourself have been calling for".

That is a very clear expression of support from the association. Of course, he makes the point that the Conservative Group does not support it, but the majority of the members of the association support the amendments. I suggest that it is reasonable, therefore, to say that the proposal is supported by the association.

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I say to my colleague from local government--the noble Baroness, Lady Hanham, whom I have known in London government for many years--that we must now ask, as, indeed, must she, how far the Conservatives are prepared to push their opposition. Are they prepared, for example, to put the whole Bill at risk? Although many of us share the concerns that have been expressed, there is much in the Bill which we support and which we want to see on the statute book as soon as possible. Are they prepared to push it to the extent that we lose the Bill? Are they prepared to push it to the extent that in the end the Government get their way and we do not even have the concessions that my noble friend Lady Hamwee has fought very hard to wring out of the Government?

We feel that this is the right compromise and that it will serve local government best. I am very pleased to support my noble friend's amendments.

Lord Elton: My Lords, I hope that the Minister will answer specifically the questions asked by the Labour Campaign--I stress the word "Labour"--for Open Local Government. It has written to 694 Members of the House,

    "to point out the dangers to local democracy--despite the concessions made by the government".

The letter then lists the dangers. The first is:

    "The 'behind closed doors' secrecy still implicit in the legislation".

The second is:

    "The concentration of power in too few hands with a cabinet or executive system and in particular with a directly elected mayor".

Thirdly, the letter refers to:

    "The discarding of all other councillors from the decision-making process".

The fourth danger is:

    "The fact that so-called 'scrutiny' does not work in the proposed structures and was more effective under the old system".

As reference was being made to that letter, but nobody was quoting from it, I thought that your Lordships should know the concerns of the Labour Campaign for Open Local Government.

Lord Smith of Leigh: My Lords, as I said at Second Reading, I am the leader of a council. I welcome the thrust of the Bill and the amendments tabled by the noble Baroness, Lady Hamwee. They will allow flexibility. The three options that were put forward may have been too much of a straitjacket for smaller councils.

The amendments define smaller councils by size, although we may want to have another definition by function, because the two main activities of district councils are probably planning and housing. If housing has been transferred to another provider, there is not a lot for an executive to do, because planning is not a function that can be exercised by an executive.

After more than 20 years' experience in local government, I was intrigued to know what kind of nostalgic world the noble Lord, Lord Dixon-Smith,

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was referring to when he was describing what went on. It was not a description of any council system that I know of, party-controlled or not. In no council in this country does every councillor exercise a similar influence on how decisions are made. Some councillors have more influence than others. That is simply being recognised by making it clear who is an executive or non-executive councillor.

The noble Lord, Lord Hanningford, said that in Essex many councillors who are not in the executive do not have enough to do. That says more about the system in Essex than it says about the Bill. There is a great deal that councillors can and should be doing. As well as scrutiny, which is an important and recognised part of the Bill, we want councillors to contribute to policy. Many council policies, including the budget, have to be gone through at a full council meeting and will need to be scrutinised properly.

In addition, the Bill reminds and encourages us all to get out and work in the community. Not all the work of local authorities is done in the town hall. We want councillors to work with people in their communities to ensure that what happens in the town hall is a better reflection of what local people want.

As the noble Lord, Lord Dixon-Smith, said, we all regret the lack of recognition of the work of local authorities in the turn-out at local elections. Most people are confused about who makes the decisions. Many think that the mayor does, even though most parts of the country have a non-executive mayor. I hope that the Bill will help by identifying who makes the decisions. If we can make sure that people in the community with an interest in what is going on know who to approach directly about particular issues, local government will be improved. We should support the amendments tabled by the noble Baroness, Lady Hamwee, and not support those of the noble Lord, Lord Dixon-Smith.

4.15 p.m.

Lord Whitty: My Lords, there is clearly a fundamental difference on this issue between me and the noble Lord, Lord Dixon-Smith, but we are all united in our respect for the record of local government in Britain and, in this context, in England and Wales in particular. Great work continues to be done by local government. This national Government have been the first to recognise that. That work has been achieved in a changing world and in changing circumstances for local authorities.

The noble Lord, Lord Dixon-Smith, accuses me of compulsion and of trying to impose a straitjacket. We are moving from a system in which only one structure of local government--the committee-based system--is available to all authorities regardless of their geographical area or their form of political control to provide three alternatives, as well as the additional possibility in the amendment. Local government and local people will have a choice.

Our consistent policy has been that every council must adopt a new constitution, giving it increased efficiency, transparency and accountability, and that

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local people should decide. That is the element of compulsion--to require choice for local people. We are moving away from a straitjacketed system that has been condemned--or at least adversely commented on--from the time of the Maud committee through to the recent report of the Joint Committee of this House and another place, to which the noble Earl, Lord Carnarvon, referred.

In contrast, the Conservative amendment would not provide such choice, except by providing the additional option of the status quo. The noble Lord, Lord Hanningfield, said that he was the first to agree that councils could not stand still. To that extent, I accept--perhaps more than does my noble friend Lord Smith of Leigh--that Essex has not stood still. The same applies to many other councils. However, they have been constrained by the committee system. The Conservative amendment would allow councils to stay still. That option would undoubtedly be taken by the least effective councils.

The Conservative amendments are not about choice. There will be choice in the structures that we have proposed. The councils to be given special provisions under the amendment moved by the noble Baroness, Lady Hamwee, will also have to make a choice. They, too, will have to examine and review their constitution to ensure that it meets the overall obligations of efficiency, transparency and accountability. Those councils will be able to choose not to adopt executive arrangements, but they will still have to reform. In particular, they will have to adopt overview and scrutiny arrangements.

It is important to recognise that all councils need to assess their structures and that they should all be involved in the Bill. However, it is equally important to emphasise the element of choice.

The noble Lord, Lord Tope, said that the concession on English shire districts with a population fewer than 85,000 had been wrung out of the Government. I am probably the one that it was wrung out of--and I feel squeezed accordingly. It seems a sensible provision. I accept that it is not what everybody wants, but it does not torpedo the principle, as the noble Lord, Lord Dixon-Smith, suggested. It is a legitimate and sensible compromise and I commend it to the House. The Secretary of State could designate other such groups. To respond to the noble Lord, Lord Hooson, the National Assembly for Wales could allow any variation of the type to which he referred.

The other criticism which has been made has run through the whole course of the Bill. It relates to the division between executive and scrutiny and overview members. The noble Lords, Lord Hanningfield and Lord Elton, and the noble Baroness, Lady Hanham, all referred to that and we have discussed it many times. But to say that councillors outside the executive have no real role fails to understand the nature of overview and scrutiny committees. I suggest that it also fails to recognise the nature of people who win council seats.

Clearly, there will be something of a hiatus as we move into the new system. Things will need to settle down and people will need to adapt to their new roles.

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But as my noble friends Lord Filkin and Lord Smith have both said, those roles are as important--and in some ways more important--in safeguarding the public interest than those of individual members of the executive. All councillors will have an important role. All councillors will have a role to play in policy development.

The noble Lord, Lord Elton, referred to things happening behind closed doors. We shall discuss that on Amendment No. 52. I believe that he is wrong to describe that situation as being behind closed doors. Nevertheless, some adjustments are being made in that context and have been made in another place.

The noble Lord, Lord Tope, has spelt out the real position in relation to the LGA. Of course, the noble Lord, Lord Hanningfield, is right that there are many within the LGA and many within all parties in local government who do not like elements of the Bill. But recognising the situation we are in, the LGA has supported the amendment of the noble Baroness, Lady Hamwee. The Government, with some persuasion, have also agreed to it. It seems to me that after the many hours we have spent on the Bill, a compromise is a sensible way forward. The Government have moved from their original position; the noble Lord, Lord Dixon-Smith, has yet to move from his position; rather than pursue his amendment, I suggest that he should now do so. I suggest that he should pursue the noble Baroness's amendment and not support his own.

4.15 p.m.

Lord Dixon-Smith: My Lords, we have had a good debate on this subject. The quality of the debate, if nothing else, has justified the tabling of these amendments.

I am most grateful to the Minister for his response. The noble Lords, Lord Smith, Lord Tope and Lord Hooson, my noble friends Lady Hanham, Lord Hanningfield, and the noble Earl, Lord Carnarvon, have all made a number of points which had common themes. I shall try to sum up the themes which have come through rather than address every individual point.

Something has been made of the fact that there was a Joint Committee of the two Houses which did not recommend the status quo. If my memory is correct--and I am open to correction--that Joint Committee was considering a draft Bill. Therefore, it considered what was before it. If it had been invited to consider a blank sheet of paper, it might well have reached a different conclusion. I say no more on that. That remains a fact.

I deal next with the question of the executive/scrutiny split. Quite fortuitously, I happened to meet the former chairman of the Institute of Directors. Knowing that he was the former chairman of the Institute of Directors, I inquired how he was passing his time. He said, "I am still working extremely hard. I have a large number of non-executive directorships". "Oh", I said, "That sounds fun. How do you find it?" He said, "Well, it is extraordinary but we find that we

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have more and more work and are under more and more pressure and we do not seem to be able to avoid being executive".

We need to be well aware that there is no clear dividing line between responsibility for executive action and responsibility for scrutiny. If scrutiny is to work and be effective, it must have power to control executive action. As soon as it has that power, it is taking executive action indirectly itself. We must not miss that.

Something has been made of the fact that under the present system, party groups may well take decisions behind closed doors. Party groups are party groups. They are not banned under the Bill and they will continue. They will continue as they have done in the past. They will not be able to do anything without the consent of the majority of their members on the council. It does not matter whether or not there is an executive. That remains the fact: ultimate decisions are taken in the open.

Nothing in this Bill prevents party groups from existing and behaving as they have done in the past. But they depend now and in the future on the consent of the members of the authority.

I want to come back to the degree of disillusionment that there is among councillors of all parties at the present time. That arises because they are experienced people who know the job of a local authority. They see their ability to act on behalf of their community being reduced.

It may well be that many people who feel like that will not stand at another election and there will be a new generation who feel that what they are doing is adequate. But I suspect that that will be because they do not know what they have missed.

That just about sums up the situation. Two other things need to be said. Both the noble Baroness, Lady Hamwee, and the noble Lord, Lord Tope, ask how far we are prepared to go to hold up the Government on this matter. That is not an easy question for me to answer because the Minister did not come to me with a proposal. But I should not have stopped at 20 per cent. The price would have been higher. If we cannot agree in the end and the Government want the Bill as badly as they say they do--and I want a great deal that is in this Bill too--it is always open to them to concede the issue. But I do not suppose that they would be as generous as that. That is not my problem.

We have had a very good and worthwhile debate. The amendments which I put forward do nothing to prevent the creation of executives in local government. I go back to where I began. The fact that that is what was on offer in the Bill is, in my view, a weakness and a lack of confidence by the Government in the system which they are proposing. That is neither right nor acceptable. My amendments are appropriate and I wish to test the opinion of the House.

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4.28 p.m.

On Question, Whether the said amendment (No. 10A), as an amendment to Commons Amendment No. 10, shall be agreed to?

Their Lordships divided: Contents, 169; Not-Contents, 221.

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