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Lord Rooker: I was not joking.

Lord Hanningfield: I recently made a speech in the Chamber pointing out that we have had 1,000 new regulations in the past three years or so. That is an enormous amount. Every piece of legislation introduces new regulations.

Lord Rooker: My noble friend Lord Macdonald has looked into the issue. The vast majority of all those so-called regulations were minor—for example, to close a road for repair. It is an absolute myth that there are loads of regulations. Some are necessary—as they were under the previous government—for road safety purposes. The vast majority, as I understand it—I remember reading the Parliamentary Answer at the time—were road closure orders required for necessary repairs to be carried out.

So it is an absolute myth that thousands of regulations are placed on thousands of local government officers every day. It is not true.

Lord Hanningfield: The Minister has given a classic example. In what other country in the world would a national Parliament be worried about road closure orders? It is a symptom of our centralised system. It is the same under both governments. Having joined Parliament from local government, I can see how everything has to be prescribed.

The spirit behind the amendment is that people should recognise that not everyone sees—as the Minister hopes— this legislation as a freeing-up. They see elements of it as being bureaucratic and number-crunching in the figures that local authorities have to provide all the time. I shall withdraw the amendment today but I am sure that we shall return to this issue during the passage of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 21 and 22 agreed.

Clause 23 ["Local authority"]:

Lord Hanningfield moved Amendment No. 71:

"( ) a regional assembly constituted pursuant to a referendum."

The noble Lord said: The amendment seeks to probe whether the Government intend any elected regional assembly to be subject to the provisions under this part of the Bill. I should be grateful for clarification on this matter. I beg to move.

Lord Rooker: It is amazing that we have reached this part of the Bill without anyone referring to the regional assemblies. Let us live in the real world. The assemblies do not exist. The detailed policy on such assemblies is still being developed. We have not made any firm

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decisions. There has been no announcement yet about the soundings exercise, which is fairly imminent, so this is purely hypothetical.

We have not made any decision on whether the assemblies' capital finance system should be governed by the provisions of this Bill or the Bill that will establish them if they are established after referendums, and if referendums take place. The legislation creating the assemblies could bring them within the scope of Clause 23(2) if that is considered appropriate. However, elected regional assemblies will not be local authorities.

The Government intend that elected assemblies will be established in the England regions in the future, but only if approved by regional electorates in referendums. We expect the first referendum or referendums to take place in autumn 2004. We would then need to introduce legislation whenever parliamentary time allows to set up the elected assemblies. That legislation will set out their detailed powers and functions, including provision for their capital finance arrangements. But those good debates are for the future, not for this Bill.

Lord Hanningfield: Can the Minister tell the Committee when the Government will announce the first dates for the referendums?

Lord Rooker: Shortly.

Lord Hanningfield: Obviously I accept that there will be legislation. We have been told that over and over again. I gather from what the Minister said that some of that legislation may apply to regional assemblies, if and when any are established. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hanningfield moved Amendment No. 72:

    Page 10, line 42, leave out subsection (3).

The noble Lord said: We welcome measures in the Bill to free local authorities to manage their finances in order to respond to local needs. However, we seek an explanation—this is somewhat similar to my previous amendment—as to why it should be necessary to make provision in the Bill to extend this regime to other bodies. Can the Minister be more specific about the kind of bodies to which the regime may be extended and clarify whether the subsection has been drafted with regional bodies in mind? I appreciate that he has given me an answer on the second issue. I beg to move.

Lord Rooker: I hope to be able to answer the noble Lord's question. Amendment No. 72 seeks to remove subsection (3) of the clause. However, the subsection serves an important purpose. It enables us, when bringing additional bodies within the system by regulations, to apply the legislation in a modified form. The kinds of bodies in question may well be structured differently from the mainstream authorities listed in the Bill in Clause 23(1).

Before giving any of these less typical bodies full access to the freedoms of prudential borrowing, we must, in particular, be satisfied that they can cope

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properly with the new responsibility of setting and monitoring an affordable borrowing limit. The power in Clause 23(2) would enable any necessary additional safeguards to be introduced. The amendment would remove that flexibility. That could work to the disadvantage of bodies with an untypical structure, which might then have to be denied access to the system altogether.

As I have no example to give of the kind of bodies that may involve, I offer that explanation on the basis that situations are always changing—bodies merge and different bodies are created for different purposes—and that we need flexibility. If I had any example of bodies to give, I suspect they would be listed in the Bill in any event.

In the draft regulation 22, examples are given of bodies, including the National Parks authorities, Broads Authority and the Lea Valley Regional Park Authority, which are not mainstream authorities. I hope that satisfies the noble Lord.

Lord Hanningfield: I thank the Minister for that answer. Obviously I accept that bodies such as the National Parks authorities should be included in the regime. It is interesting that other bodies could be included. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 agreed to.

Clause 24 agreed to.

Clause 25 [Budget calculations: report on robustness of estimates etc]:

Lord Smith of Leigh moved Amendment No. 73:

    Before Clause 25, insert the following new clause—

(1) The provisions of this Part shall be applied to those local authorities which have—
(a) been assessed as weak in Corporate Performance Assessment overall;
(b) been assessed as weak in Corporate Performance Assessment in "Use of Resources";
(c) received an adverse report from their external auditors about their financial management.
(2) The application of the provisions of this Part to a local authority shall cease if a subsequent assessment or report shows improvement in its financial management."

The noble Lord said: The purpose of Part 2 was clearly established in the Second Reading debates in both Houses by the Government's Front Bench spokesmen. Broad agreement exists that the overwhelming majority have to have, as my noble friend said,

    "effective processes in place to manage and monitor their budgets".

The problem therefore lies with a small number of local authorities which do not live up to that requirement. As my noble friend the Minister in another place said, it remains the case that a small number of badly managed and poorly performing local authorities tarnish the good reputation of local government.

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If the problem lies with a small number of local authorities, why is Part 2 attached to the performance of all local authorities? The amendment seeks to limit the provisions of Part 2 to those local authorities which need to improve their procedures and processes and to target in on those.

In his letter to me replying to the points raised at Second Reading, my noble friend admits that the new duties under Clauses 25, 27, 28 and 29 will not be a matter for central government to police. If that is the case, why on earth are all local authorities meant to jump through these particular hoops?

I appeal to my noble friend's deserved reputation for directness: let the legislation apply only to those local authorities that have a problem and to which it needs to apply. The remainder of local authorities feel somewhat offended that procedures that are natural and normal to them are suddenly now applied through this legislation. I hope my noble friend will listen to what I say and concentrate the attention of the Bill on those who need its direction. I beg to move.

Lord Hanningfield: I support the amendment. The debate has shown that there is a lot of unanimity across local government areas. We have debated several times the CPA regime and what is happening in local authorities. The amendment is laudable and I support it.

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