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Lord Greaves: My Lords, the issue has been discussed during the passage of the Bill, and it is relevant. We should welcome the noble Baroness, Lady Byford, back to our discussions on the Bill. Her

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colleague, the noble Lord, Lord Dixon-Smith, has performed valiantly in her absence. I should also apologise for the fact that I could not be present on Report, for reasons of illness. I was very grateful to my noble friend Lord Livsey for standing in.

The principle behind the amendment is important. The details of the amendment do not actually match the need in the legislation, but in a sense that is not important. What is important is that we want a commitment from the Government that the extra work and costs will be funded.

It is no secret that there is a great crisis in local government at the moment, certainly in England. Now is not the time to discuss in detail the present problems of council tax levels throughout the country. The noble Baroness, Lady Farrington, nods her head in agreement, although she may not agree with me on anything else today. Why the crisis is taking place at the moment—why council tax for the new year is at the levels proposed—is a huge mystery. I do not think that anyone quite understands it.

Local government has got to a stage where it is bursting through a barrier. It cannot go on providing the services that it provides at the moment without substantially more money. The Government will say that more money is being provided, and it is. However, it is clearly not enough to do the job. It is fairly clear that one of the fundamental reasons why the crisis is happening is that the Government are putting more and more responsibilities on local government and simply not funding those extra responsibilities. That is where the Bill has relevance to the crisis.

The noble Lord, Lord Hanningfield, explained quite clearly that, unless the Government are prepared to fund adequately each and every additional responsibility that they give to local government, the crisis will get worse. Individual extra responsibilities such as that under discussion do not of themselves involve a large amount of money, but when they are added together there is a serious problem.

We cannot support the exact wording of the amendment because it is technically deficient. I hope that the noble Lord does not mind me saying so. Nevertheless, the principle that he raises is one that we have mentioned throughout our debates on the Bill, and we need a satisfactory answer from the Government.

Lord Stoddart of Swindon: My Lords, previous speakers have showed us what difficulties local authorities will be in because the Government keep piling jobs on to them but, at the same time, do not make the resources available. To a large extent, local government has been robbed of the ability to raise its own resources. In my book, we should get back to real democratic local government—independent local government—raising the resources that it needs through council tax or new sources of revenue.

In addition to legislation piled on local government by central government, we now have legislation piled on it by the European Union. Without any additional resources, it therefore has to raise even more money to

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satisfy the legislation imposed by not only our own Government, but a government sitting in Brussels outside this country. Local government is, so to speak, in double jeopardy.

Those are much wider issues, but there is no doubt about the figures that we have seen this week of increased rates. The average rate on band D has gone over £1,000. It is becoming very burdensome on local people to have to deal with the extra services imposed on them without having the resources. The longer-term solution is to give local government freedom to raise more of its own money, but the short-term answer is for the Government to assure us that they will allocate to the local authorities sufficient funds for them to carry out the duty imposed on them by the Bill.

Lord Whitty: My Lords, the noble Lord, Lord Stoddart, and to some extent the noble Lord, Lord Greaves, strayed somewhat wide of the amendment, although we could debate matters that they raised. The amendment proposes a very specific hypothecation. Even if I were to accept the estimated costs given by the noble Lord, Lord Hanningfield, we are talking about only a small part in the total area of waste management.

The issue of hypothecation raises a number of problems. Although I—

Lord Hanningfield: My Lords, the Minister is not speaking to the right amendment. My hypothecation amendment is the next one.

Lord Whitty: My Lords, we are on Amendment No. 4, are we not?

Noble Lords: No!

Lord Whitty: My Lords, the noble Lord, Lord Dixon-Smith, referred to Amendment No. 21, which is in the next group.

In any case, I shall go back to Amendment No. 3, which deals with the totality of resources. Although I can understand local authorities always saying that they do not have enough, it is instructive that through the block EPCS grant there have been very significant increases in recent years. Certainly, the noble Lord, Lord Hanningfield, will be familiar with the overall figures. There have also been benefits in this field from PFI projects, and so forth.

A substantial amount of resources are allocated by Government to the totality of waste management. It is unusual and I believe unprecedented to specify within the Bill that particular resources will be provided for as part of the block grant. We are requiring a number of administrative responsibilities to be undertaken by local authorities: the keeping of information, enforcement of regulations and so forth. The additional burden of that can be exaggerated. I believe that to some extent the estimates probably do exaggerate it. To a large extent, waste disposal authorities have to provide that information to the

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Environment Agency in any case. Therefore, I would still argue about the degree of financial burden. Nevertheless, there is a financial implication in the Bill.

However, it would be very unusual indeed to put on the face of the Bill that that specifically should be a feature of the block grant either through the formula or by hypothecation and not to allow that to be dealt with in the normal way between government and local authorities. The administrative costs of this part of the Bill would normally be dealt with through the block grant system and reflected in the local amount for EPCS within that block grant. To start to unravel that system would lead us into significant difficulties and would be unprecedented. It is important that adequate resources are provided, but not in the way specified in the Bill.

Lord Hanningfield: My Lords, perhaps I may press the Minister again on that point. It is imperative that such resources are included in a block grant if the amendment is not accepted. As I have said, we are already spending much more on waste disposal than is provided for in the block grant. As leader of Essex County Council I know that we put in considerably more money than is allowed for by government figures, and we should like to put in more. Can the Minister assure the House that this will be included in the block grant and that he will make certain, when he talks to his colleagues, that this is part of a block grant for future local government settlements?

Lord Whitty: My Lords, as regards the calculations for the block grant, I cannot give a quantum commitment otherwise I would be committing the Chancellor of the Exchequer to future expenditure well beyond the current term of this Parliament and possibly even of this Government. I am not in a position to do that. However, clearly, in the calculation of the EPCS element of the block grant one has to take account of the additional burdens that might be implied by additional legislation. I think that is as far as I can go.

Lord Hanningfield: My Lords, I thank the Minister for that reply. I wish he could have been more explicit about how local government will be funded to implement this legislation. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 [Duty not to exceed allowances]:

Lord Hanningfield moved Amendment No. 4:

    Page 7, line 33, at end insert—

"( ) All monies in respect of financial penalties collected under this section shall be hypothecated directly to waste disposal authorities as directed by the allocating authority."

The noble Lord said: My Lords, in tabling Amendment No. 4 I am attempting to ensure that local government get back at least some money to help to implement this legislation and to help to fund the complicated and detailed work we are trying to do in recycling waste and in waste disposal, which costs local government a lot of money. As we have said in a

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previous debate, there is not enough money. We do not want to debate levels of council tax today but we want to find enough money for local government to carry on its work to assist the implementation of the Bill.

The amendment contains a way to do that. Money will be taken from local government in fines. I am sure that noble Lords would agree that it would be fair for that money to be recycled back into local government to help with waste disposal. In Committee the Minister stated that probably it would not be right to reimburse fines. It is to be hoped that only a few local authorities will be fined. The money could then be apportioned back to local government to help with the recycling issues I have just described. That would play only a small part in helping with the cost, but it could be a useful part. The money would then be diverted directly into paying for the waste system.

The Government have announced that they will thoroughly review local government finance and consider different suggestions for ways of raising money locally. I have been involved in discussions about that. This kind of provision might be a way of giving extra money locally. Can the Minister tell the House what will happen to the money? I did not pursue the previous amendment, but I hope that the Minister at least will say that the money can be "recycled" to help recycling. I beg to move.

11.45 a.m.

Lord Whitty: My Lords, we are now directly on the issue of hypothecation. Amendment No. 21 is grouped with this amendment and I shall therefore take as read what was said earlier by the noble Lord.

The issue of hypothecation is important and raises serious principles. Hypothecation of fines or penalties in general also raises rather wider issues than simply in relation to waste management. Nevertheless, as I indicated earlier, I have sympathy with the comments of the noble Lord. It is not the intention of the Government that the raising of fines should lead to a drain on the waste management system. So, in a sense some kind of hypothecation is implied by my saying that.

However, we are not in a position to have a mechanistic form of hypothecation, as proposed by the amendment. We are discussing how best we can ensure that those resources are not lost to the waste management system. It is important that the framework for transferring resources from penalties back into the waste management system is soundly based. Discussions on that issue are still continuing. Therefore, I am not in a position at this stage to indicate anything which could turn itself into a provision within the Bill.

It has been accepted that any increase, for example, in the landfill tax over and above the present escalator increase would be recycled back into local authorities and businesses in that area. We are currently working on the options for achieving that. In that context and in view of the options for recycling revenues raised from penalties under these provisions, that could also

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be tackled. I am not in a position today to give the House any further commitment to that. However, noble Lords can take from what I have said that the Government have some sympathy with that.

Even if the timetable was correct or appropriate, it is not entirely clear that we would want to achieve that by an amendment to the Bill. There will be further stages of the Bill in another place, and it may be that we shall return to this matter. However, it is not at all clear that this is necessarily the best way to achieve what we both want in this respect.

I turn to Amendment No. 21. There is a slight problem in that Amendments Nos. 21 and 4 are mutually exclusive. Amendment No. 21, tabled by the noble Lord, Lord Dixon-Smith, would hypothecate penalties specifically to forestry. As the Minister responsible for forestry, that holds some attraction. It would be a nice idea in certain circumstances. However, to provide in the Bill for 95 per cent of the penalty income to go that way is probably going too far.

Obviously, it is preferable that any money taken out of the system is in some way put back into the system. However, I believe that both the amendments are over-specific as to how that should be done. I am not in a position to offer an alternative to the House at this stage. However, with that indication of the Government's overall intent I hope that the noble Lord does not pursue his amendment today.

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