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Lord Hanningfield: I am sorry, but the noble Lord has not answered my point. We have just pointed out on the earlier amendment that the Government have no power to tell the Welsh Assembly to publish or make available a list, but here the Bill takes the power to tell the Assembly that it can change or vary a grant. That is the point I sought to make.

The noble Lord, Lord Rooker, said that we cannot tell the National Assembly for Wales to publish a list, but we can tell them to vary the grant. I find the whole thing inconsistent and I do think the Minister has responded to that.

Lord Bassam of Brighton: I suppose it is part of the beauty of the workings of devolution. As regards powers, Parliament can choose not to give the power to the National Assembly for Wales, but if it chooses to do so, then it has to do it in a way that is consistent with the devolution settlement. This is the way the power should work.

Lord Hanningfield: I still do not understand how these two elements are separate in the devolution settlement. On a minor point such as grants to community councils, we cannot tell the Assembly to publish a list, yet we can tell it to make variations to the grant. I am afraid that I do not accept these responses.

Lord Bassam of Brighton: This is a matter of choice for the National Assembly for Wales. The power is in place. How the Assembly chooses to exercise it is a matter very much for itself.

Lord Hanningfield: I hear what the Minister has said, but I am sure that we shall return to these issues. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 37 agreed to.

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Clause 38 [Grants in connection with designation for service excellence]:

Baroness Hamwee moved Amendment No. 101A:

    Page 17, line 35, leave out "any of the following"

The noble Baroness said: I had asked for this amendment to be grouped with Amendment No. 101B as it makes no sense without it. Will the Minister be happy for me to speak to both amendments? I cannot say anything about Amendment No. 101A on its own.

Lord Rooker: Although the amendments are not together on the groupings list, I shall be quite happy to deal with them both.

Baroness Hamwee: I am grateful. An error has crept in somewhere in the procedure. In effect, Amendment No. 101A is consequential to Amendment No. 101B, which questions the ability of the Secretary of State or the Welsh Assembly to make a grant for applying for designation based on excellence—here I suppose that we are talking about beacon status under the CPA regime—and a grant for rewarding the award of such a designation.

Earlier the Minister said that grants are made on the basis of need, but clearly that does not extend to this clause. It seems quite extraordinary that here we are allowing for the giving out of goodies to those who have been good boys and girls. That is more or less what this provision amounts to, other than the provision allowing for expenditure on disseminating information about best practice, which I am sure we would all support.

This clause was not dealt with at all in the Commons and I think it proper to ask the Government to justify its inclusion. I beg to move.

6.30 p.m.

Baroness Hanham: I support the questions posed to the Minister by the noble Baroness, Lady Hamwee. The clause raises the question of how much it costs to become a beacon or best value authority. If the clause is what the Explanatory Notes say it is, it enables the Government to repay to a local authority the costs that it has incurred to achieve beacon status or to become designated as "excellent".

That is an extraordinary admission of the folly and the amount that must be done to achieve such designations. We are always discussing the cost to local authorities of regulations and of various government squeezes. The clause seems explicitly to underline that. If the Government are to be able to pay to a local authority the money which all that has cost it, what are we talking about in terms of grant? Is it expected that the grant will be as much as it needs to be to achieve the status or to carry out the duties?

I am bound to say that when I scoured the Bill I missed the implications of the clause. As the noble Baroness, Lady Hamwee, said, it requires explanation so that we know exactly what is being proposed. On grant towards expenditure incurred, every other local authority which does not achieve excellence or best value status would also have spent that money. So why

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is it only those who achieve that status—they will receive a reward anyway for such a designation under paragraph (b)—that will receive grant for the costs incurred? Explanations are required for the clause and I congratulate the noble Baroness, Lady Hamwee, for having picked it up.

Lord Rooker: I shall break the habit of a lifetime and the commitment I gave earlier today. I shall not only do what I agreed to for Amendments No. 101A and 101B, but I shall also put a few words on the record about the clause. It may be more appropriate if I speak first to Clause 38 and then to the amendments.

Clause 38, which applies to England and Wales, provides that the Secretary of State or the National Assembly for Wales may pay grant to best value authorities, subject to any best value duty, in relation to any expenses that they have incurred in applying for the award of a designation based on excellence in provision of services. That was one sentence, by the way. Where a best value authority is awarded such designation, the power will also enable grant to be paid as a reward for such designation and in relation to expenses incurred or to be incurred by the authority in disseminating information about best practices.

The background to this is the beacon council scheme, introduced in 1998, to identify centres of excellence from which others can learn. Authorities are awarded beacon status on the strength of excellence in the delivery of specified services, supported by good overall performance and effective plans for dissemination. The scheme is open to all best value authorities in England, but subject to any of the best value duties in Sections 3 to 6 of the Local Government Act 1999. Beacon authorities are currently awarded a retrospective grant to cover the costs incurred in disseminating information about their best practices. Grants are paid by the Secretary of State under the special grant-making power of—here we go—Section 88B of the Local Government Finance Act 1988.

The local government White Paper confirmed the Government's commitment to the long-term future of the beacon scheme. Wales does not currently operate a beacon scheme, but may introduce something similar in the future. Clause 38 reflects the Government's long-term commitment to the scheme by establishing a specific legislative basis for paying grant to beacon authorities. It will also enable the Government to provide financial incentives to encourage participation in the scheme through grant relating to expenses that authorities have incurred in applying for beacon status and grant as a reward for gaining beacon status. That is why the clause is in the Bill.

I shall now deal with Amendment No. 101A. It relates to Clause 38, on which I have just given some background information and which provides for grant to be paid to best value authorities. Under Clause 38, grant can be paid for any of three purposes: first, as a grant towards expenditure incurred in applying for the award; secondly, as a reward for being awarded a

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designation; or, thirdly, as a grant towards expenditure incurred in disseminating information about best practices.

Amendment No. 101A would mean that where an authority was awarded a designation, grant would be payable both as a reward for being awarded a designation and towards expenditure incurred in disseminating information about best practices. Central government would not therefore have the discretion to restrict the grant to only one of the above purposes, which we may want to do.

Under Amendment No. 101B, which relates to the same clause, any grant payable under Clause 38 would be payable only for the third purpose—as a grant towards expenditure incurred in disseminating information about best practices. Central government would therefore not have discretion to pay grant for either of the other two purposes listed above. That could significantly limit policy options—for example, if it were thought that paying grant towards expenditure incurred in applying for an award would be a necessary incentive to encourage authorities to take part in the scheme.

I realise that this is a special, one-off provision, as it were, but I hope that what I have said about the two amendments and the background to the clause explains why the clause is in the Bill, which was a legitimate question. I hope that I have satisfactorily answered it.

Baroness Hanham: I want to come back on one question; again, to confirm what the Minister said. In Clause 38(1)(a), am I right that the grant towards expenditure incurred by the authority relates only to those designated as best value authorities? Would it be open to the Minister to decide that authorities which had not achieved that status ought to receive some sort of grant to enable them to apply for or advance their rationale for such status? The Minister may have answered that, and I apologise if I missed it.

Lord Rooker: True, it was wrapped up in my explanation of the clause, but any authority can receive a grant under paragraph (a)—that is, for the cost of applying for designation. So it is not just for those that are successful. Otherwise, there would be no incentive for authorities to apply. If they thought that they would incur the cost of applying if they were unsuccessful, they would be wasting that cost, so any authority can receive a grant under paragraph (a) for the cost of applying for the designation.

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