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Lord Rooker: I am all in favour of trying to save time. I would hate to think that a local authority would fall foul of some crazy interpretation of the Bill and that because its costs turned out to be a little lower than it thought and it made a profit of a quid, that nullified the whole exercise. I would hate to think that the system was so stupid that that could occur. I am not looking for nods from my officials, and I am not getting any. Obviously, if the noble Baroness tables such an amendment I will be happy to give her a considered response to it.

Lord Hanningfield: I would like to question the Minister a bit more. Towards the end of his response, he seemed to indicate that local authorities could include some of the costs, as they saw fit, such as the cost of the democratic process in local government and the costs of council buildings. It is sometimes difficult to work out what the actual council costs are. Running committees and so forth have a cost. They could be interpreted as part of the on-cost. I should like to give an example.

Lord Rooker: Surely the examples the noble Lord has given do not cover discretionary services.

Lord Hanningfield: The cost of democracy goes across the whole council. For example, because of the problem with the redirection of revenue support grant, we are having to massacre our discretionary services. We have 40 archaeologists, as Colchester is the oldest town in the United Kingdom. Every plot that is dug up in every bit of Colchester has to be photographed or reserved. If we could make ordinary market rate charges for archaeology, we could probably keep our team. As we cannot, we will probably not have many

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archaeologists at all, because we cannot charge the cost that would be asked by outside people. So we will probably decimate our archaeology team.

It is not just a question of the cost of the team but of the democratic process. There is a cabinet member responsible for that area of work and a committee looking at it, resulting in substantial cost overheads. That cost is to do with the democratic process in local government, not just with providing the service. It costs about 4 million to run our county hall in Essex. As the noble Baroness, Lady Hamwee, said, it all depends on the interpretation of costs.

The Minister seemed to indicate that we could include some of those costs in the overall costs that could be recovered, which might enable some discretionary services to continue. If we just charge the actual costs of the archaeologists, the service might go, but if we could include the other costs, it might be able to continue.

Baroness Hamwee: Before the noble Lord argues a case that could be to local authorities' detriment, I draw to his attention the draft guidance from the ODPM, which suggests that there are two options to establish the cost of provision, one of which is to include an appropriate contribution to costs relating to corporate and democratic core and unapportionable central overheads. I am a bit worried that the longer the noble Lord goes on talking, the more he will talk himself out of including such costs.

Lord Rooker: The noble Baroness has answered the question, in a way. There is a degree of latitude. I do not know why we keep talking about Essex; I do not know what it pays its chief executive, but some of the runaway costs might be objected to by those on the receiving end of the charges. So there is a warning for you.

Lord Hanningfield: I can assure the Minister that the leader has to work a lot harder than the chief executive, but does not get anything like the recompense. With that—

Lord Rooker: Stop digging.

Lord Hanningfield: Yes. We will consider this important area. Obviously we welcome the new power but we want to make certain it helps to keep some of the discretionary services in place. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 190 to 192 not moved.]

Clause 94 agreed to.

Clause 95 [Power to disapply section 94(1)]:

Baroness Hamwee moved Amendment No. 192A:

    Page 51, line 13, leave out paragraph (a).

The noble Baroness said: I shall speak also to Amendment No. 192B. Clause 95 provides the power to disapply the clause we have just been debating. Amendment No. 192A would remove the power from the Government to disapply Clause 94 with regard to particular descriptions of best value authorities or

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particular best value authorities. Amendment No. 192B is similar, with regard to particular kinds of service other than those which apply for all best value authorities—for the reasons that we gave quite a few times when debating that clause. We do not like the distinctions made between authorities.

As I understand it, the Government said that the charging power should be available to all authorities. I assume that this clause is, at least in part, about the CPA categories. The consultation draft to which I referred in the previous group of amendments says that the provisions were scrutinised by the House of Commons. Well, not these provisions, which is why I tabled the amendments.

Paragraph 8 of the draft refers to encouraging the improvement of services. I am unclear how that is covered or regulated by the Bill. In particular, paragraph 18 says that the power can be removed, which means that the Government could take action in the event of unfair competition—for example, where an authority was undercutting local private sector suppliers of a service and especially where substantial numbers were given discounts on charges.

Even leaving aside whether it is proper to try to control things from the centre in that way—and although we may not be as much in favour of the free market as the noble Lord, Lord Hanningfield, we believe that the market tends to regulate matters to some extent—I cannot see how that is necessary if we retain Clause 94(3). Perhaps the Minister can help me on that. I beg to move.

Lord Bassam of Brighton: We cannot support the amendments, and I will explain why.

The power in Clause 95 is a reserve power, which we expect to use only very exceptionally. But it means that the Government could take action if an authority were to misuse the power to charge. An example might be where it became clear that an authority was not complying with the duty in Clause 94,

    "to secure that, taking one financial year with another, the income from charges under that subsection does not exceed the costs or provision".

If, as a result, the authority was effectively undertaking unauthorised trading activities, Clause 95 would enable the general power to charge to be withdrawn from that authority.

The power in Clause 95 might also be used if it became clear that it was not in the public interest for any best value authority to charge for a particular discretionary service. Clause 95 enables the Government to take action in either of these circumstances, if Parliament is content.

I should draw attention to the combined effect of the two amendments. The charging power could only be disapplied from all best value authorities and only for a particular kind of service. So it would not be possible to withdraw the power to charge from an individual authority in the event that it was misusing the power—something of a blunderbuss.

I am afraid that the amendments might even be an invitation to some authorities to abuse the power to charge and to act beyond their reasonable use of the

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powers. We think that this could happen if the Government had no power to intervene in the case of misuse other than to withdraw the charging power from all authorities, which would unnecessarily penalise those that were acting properly and within their powers.

Amendment No. 192A would prevent withdrawal of the power to charge from an individual authority or from groups of authorities. It would not prevent disapplication of the power per se because it would leave in place the power to disapply the charging power in relation to particular kinds of service by those authorities. I take it, therefore, that the noble Baroness acknowledges that the power to disapply is needed. But disapplication of the power on a service-by-service basis would result in a lengthy and time-consuming process for Parliament, which would have to consider it, since every possible discretionary service that an authority might undertake would need to be identified and disapplied separately. I am sure that, on reflection, the noble Baroness would agree with me that that would not be a sensible use of parliamentary time.

Amendment No. 192B would mean that any disapplication under Clause 95 must apply to all best value authorities. That would prevent the Government from withdrawing the power from a particular authority if it misused the power. The combined effect of the amendments would mean that the charging power could only be disapplied from all best value authorities.

I hope that, with that explanation, the noble Baroness will feel able to withdraw the amendment.

Baroness Hamwee: The noble Lord is on a winner because he knows that I have to withdraw my amendment today. I do not agree with the reasons he has given for the necessity for the clause. For it to be disapplied because it might not be deemed in the public interest to charge for the service seems questionable. What happened to freedom and flexibility?

Perhaps that one is an exception, but I think I will at the next stage go back to my question about why it is necessary to be able to remove the power to stop an authority making a commercial return if Clause 94(3) is in place. It does not seem necessary to me. If we really are talking about freedoms and flexibilities, giving a freedom and retaining the power to withdraw it needs to be justified. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 192B not moved.]

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