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Baroness Hanham: I find it quite surprising that a grant may be revoked. I can understand that it might subsequently be varied, but why should it subsequently be revoked? Either it was justified when it was first given or it was not. If it was not justified, it should not have been given, and, if it was, I cannot see what would enable or prompt the Minister to revoke it subsequently. We should be grateful for an explanation.

The Explanatory Notes are our bible, as I have said in the past. They state in relation to Clause 36:

with which we are all intimately familiar—

    "currently only 41 parish or town councils satisfy this criterion"

for a best value grant. So, presumably, we want to ensure that parish councils achieve high standards and receive best value grants. It would be a pity if, having achieved all that and having reached best value status, the grant was revoked. It is a question of why and under what circumstances.

Lord Rooker: We have some sympathy with Amendment No. 98. It is not the kind of thing we plan to do—we have one straightforward determination, one financial year, with everybody knowing where they stand; the money would be paid and spent, and that would be that. It is not our intention to use the power to determine or revoke best value grants in any arbitrary way, believe you me. But we think it is right

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to be able to compensate a council which had lost a significant amount of best value grant through no fault of its own but because of an administrative error. I am concerned about that, because councils can make mistakes filling in forms applying for grants and lose out purely because of administrative errors.

There may be circumstances in which some parish or town councils become eligible for best value grant quite late in the day after an initial determination of grant has been made. This power would allow us to make a replacement determination.

We would revoke a grant only for purely technical reasons. How it could happen I do not know, but a grant might be made to a council that was not eligible. I do not know whether that happens very often but those are the kind of circumstances envisaged. If a grant was made to a council that was not eligible, it would need to be revoked—before the money was spent, I hope. But it would not be our intention to use this power in an arbitrary way. It would be a crisis for a grant to be paid and then revoked.

The size of parish and town councils varies enormously. Some are tiny, while others are bigger than some small district councils, covering many thousands of people. It is simply not possible to compartmentalise them all as the same kind of body. I hope that that is a satisfactory explanation. I do not know whether there is any example of such grants to parish or town councils being revoked under the existing processes. However, I repeat what I said earlier, because it is relevant. Town and parish councils do not come under Section 88 of the Local Government Finance Act 1988. They are not covered, so I do not know of any circumstances in which grants have been paid and then revoked or varied under the existing processes.

Lord Hanningfield: I note the noble Lord's comments about grants being varied. One could accept that point. However, if a grant has been paid to a council that does not qualify, that would be the Government's fault. Parish, town and community councils could be frightened off by this kind of measure. Knowing that a grant could be revoked, the worthies could decide not to apply for it. I hope that the Minister might reconsider the part about revoking a grant, although I understand and accept the need to vary it. The Minister said that circumstances would have to be quite exceptional and I hope that he will reconsider the element of revoking a grant.

Baroness Hanham: Before the Minister replies, perhaps I may raise a further point. What happens if the revocation comes as a best value council suddenly becomes a non-best value council and the position changes in a financial year? This depends on Audit Commission reviews and how they operate. Is it possible that that might be one reason for it? If that were the case, would it be left to the end of a financial year before such a revocation took place? I think the

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Minister is struggling with this, and we are struggling too. A few concrete answers from the Minister's officials might get him off the hook.

Lord Rooker: If the noble Baroness thinks that I have been struggling so far, wait until she hears what I have to say now. If money had been paid to an authority on the basis that it was good or excellent and it changed during the course of the financial or the following year, we could not take the money back because it had been paid for a purpose. But listen to this other reason for revocation: we might get the parish council's name wrong. This is the best bit—it has happened occasionally, even with full local authorities, so we need to revoke and replace money under the right name. It beggars belief, but it has happened. I do not have an example, but apparently it has happened occasionally—very occasionally, I assume—with full local authorities. The name was wrong in an order and the money had to be replaced. That is another example.

Baroness Hamwee: That does beggar belief. If there is a mistake in the name and it should be Much Binding in the Marsh instead of Much something else—my imagination fails me—and there is no council with the wrong name, that is just a matter of rectification. Everyone, in all walks of life, makes the odd mistake. If the wrong name is that of another council and money has been paid, it is simply too tough to say, "Give it back, we did not mean you, we meant your neighbour". I am sure that the Minister's advisers cannot quite mean that. I hope not.

Lord Rooker: I have said all that I intend to say.

Lord Hanningfield: We wondered why we got so little grant in Essex this year. We must have been confused with Birmingham.

We hear the Minister's arguments. I think that we shall return to these issues as we proceed. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hanningfield moved Amendment No. 99:

    Page 16, line 35, at end insert—

"( ) Any determination made under this section shall be reported to Parliament as a special grant report pursuant to section 88B of the Local Government Finance Act 1988 (c. 41) within not more than five months of the date of such determination."

The noble Lord said: The amendment aims to ensure the transparency of any grant paid to a best value parish council under Clause 36 by ensuring that it is scrutinised by Parliament.

We again welcome the Government's intention to reward good performance by parish councils, which are a fundamental tier of local democracy. We support awarding grants to enable councils to meet the requirement of best value status once it has been attained.

Our concern is to ensure that the distribution of grants is equitable and balanced, and parliamentary scrutiny will be helpful in ensuring that this is the case.

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The amendment would ensure that grants paid under Clause 36 are reported to Parliament in the appropriate manner. This will maintain their transparency and the credibility of such transactions. I believe it will provide a better incentive for those councils striving to improve to see the grant system operating fairly and openly.

Lord Rooker: I regret that I cannot help the noble Lord. As I hinted when dealing with the previous amendment, we could not operate this because town and parish councils are not relevant bodies under Section 88 of the Local Government Finance Act 1988. It simply does not apply to English parish councils, so it would not be possible to use that mechanism.

There are about 400 district councils in England, 30-odd county councils, 30 London boroughs and 30-odd metropolitan district councils.

Lord Hanningfield: There are 300 district councils.

Lord Rooker: Okay. There are 8,000 parish councils, all varying enormously in size. We are in a different league altogether here. It would not be relevant. They are not covered by the 1988 Act, so the mechanism in the Act could not be used. However, the absence of a special report does not mean that Parliament would no longer be able to consider the grants under Clause 36. Parliamentary approval will still be needed within the ambit of the relevant department's request for resources, and Treasury consent will also be needed.

The grants made under Clause 36 are likely to be quite small or to be repeated. The need to continue to rely on the grant-making powers under Section 88 would be very cumbersome, as I have explained. Therefore, I hope that the amendment will be withdrawn.

6.15 p.m.

Baroness Hanham: May I take up a point just made by the Minister? I pursue this possibly out of my own ignorance here. If a grant must be approved by the Treasury, is any stage of such a decision made available to Members of Parliament? I appreciate that the Minister made the point that there are over 8,000 parish councils and so many decisions must be made, but equally a list should be made available somewhere to Members of Parliament which indicates what are those grants and for what they have been given. I ask that if for no other reason than it would be quite interesting to scrutinise the allocations and see what the money is being spent on, in particular given the different sizes of parish councils. Some are small and some large. We should like to know the purposes to which those grants are being put.

It may be that the Minister will leap to his feet and tell me that a list of these grants is always available on the Internet, the Intranet or in another form. Alternatively, it may be that they are not put into the public arena at all, in which case I think that that would be rather retrograde. We may wish to return to

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that with a different amendment seeking to establish how information about those grants is made available to the public.

I hope that the Minister feels free to answer my questions.

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