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Lord Smith of Leigh: I thank the Minister for most of his comments. I should perhaps mention that the Minister who gave me the last assurance was left out in the reshuffle. I hope that that will not happen to my noble friend. However, I think that he went as far as he could to indicate that the Government realise they have to address this outstanding issue. It is a problem that must be dealt with if airports such as Manchester are to be competitive. We did not intend the amendment to allow us to do anything of which the Secretary of State did not approve. I hope that the amendment is seeking a national airports policy that promotes what the Government feel that airports should achieve.

Baroness Hamwee: Before the noble Lord seeks leave to withdraw the amendment, I hope that he will consider introducing a Private Member's Bill when the pace is a little more relaxed and after consultation with the Government. I cannot say that we would support every dot and comma of it, but we would certainly support the principle of using parliamentary time for that purpose.

Lord Smith of Leigh: I thank the noble Baroness for that helpful comment. However, the Minister said that there will be discussions between the Government and Manchester Airport on the way forward. Perhaps we can find a way forward through those discussions. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 99 [Procedure for orders under section 98]:

[Amendments Nos. 201A to 202 not moved.]

Clause 99 agreed to.

Clause 100 [Categorisation of English local authorities by reference to performance]:

Baroness Hamwee moved Amendment No. 202A:

Page 54, line 36, leave out "must" and insert "may"

The noble Baroness said: In moving Amendment No. 202A I shall also speak to Amendments Nos. 202B and 202C.

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We now come to Clause 100, which deals with performance categories. The title of the clause says it all:

"Categorisation . . . by reference to performance".

I do not need to amplify our position at length. We think that performance assessment is useful. Indeed, in my days in local government I used very much to welcome Audit Commission reports and the whole process of what was then called "performance review". As these things are a matter of buzz phrases, I am sure that the terminology has moved on. However, we do not agree that rights should flow from that categorisation. I am therefore proposing that the Bill's wording should be changed from,

"The Audit Commission must from time to time produce a report on its findings in relation to . . . performance",

to,

"The Audit Commission may . . . produce a report".

I am also arguing that we should remove the provision in Clause 100(2) requiring the report to categorise local authorities and remove subsections (4), (5) and (6), which are also about categorisation. It would allow the Secretary of State to correct clerical and typographical errors, as subsection (5) provides, subject to removing other parts of the subsection. I beg to move.

7.15 p.m.

The Deputy Chairman of Committees (Lord Lyell): I should advise the Committee that if Amendment No. 202C were agreed to I could not call Amendments Nos. 203 and 204.

Lord Hanningfield: I support the amendment. We will be moving our own, more detailed amendment later—although it will not be moved if this one is agreed to.

The CPA process has taken a tremendous amount of time and resources out of local government. I am not sure exactly what benefits we will get out of it. In moving her amendment, the noble Baroness, Lady Hamwee, said that she did not like the categorisation process. I do not like the whole process. Local government is now governed by inspection. In the past few years, the sums spent on inspections have increased, I gather, towards £1 billion. That money could be much better spent. I am aware of the sums that we spent in Essex county on the CPA process. We came out of the process well, but I should have preferred for that effort to be spent on providing better services. I will be interested to see how the Minister justifies the CPA process. I think that the process will be around for a year or two and then disappear. We support the amendments dealing with this matter.

Lord Bassam of Brighton: I am nonplussed at the thrust of these amendments. I believe that they would take the rigour out of the system.

Amendment No. 202A, for example, would remove the requirement for the Audit Commission to produce a report of its findings on the performance of English local authorities in exercising their functions. I think

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that the Audit Commission has done incredibly valuable work. Both in this Committee and certainly on the Floor of the House we have discussed the importance and value of audit in enabling local authorities to conform to the financial disciplines that are so important in determining how they create good value for money, equate their performance in a way that the public can understand and measure and compare. All of that is very important indeed. The wording of the amendment would leave the decision on whether to produce reports to the discretion of the commission. I do not think that that is right. I think that there has to be an understood, clear-cut and no-nonsense reporting process.

Amendment No. 202B would remove the requirement on the Audit Commission to place councils in categories according to their performance in exercising their functions. I heard the noble Lord's remarks about the CPA process. However, councils have benefited from the process. Indeed, much of the thinking behind CPA was driven by local authorities that were trying to raise their game and improve the quality of their performance. If we were to go along with this particular amendment it would undermine the whole process and remove a whole chunk of activity that is designed to drive up the performance of those authorities and make them provide the very best public service in their locality, as we all expect.

I think that the categorisation system has focused the minds of local authorities in seeking to provide the best for their local populations. It certainly does that in my area. We were not in the "excellent" bracket, but we were "good". I was very pleased about that.

Amendment No. 202C would prevent the Secretary of State from making orders listing local authorities by categories of performance assessed through CPA. I think that that would be counterproductive. Contrary to the intention of those who tabled the amendment, I think, the amendment would hinder the provision of the freedoms and flexibilities that we are championing in this legislation and that have been volubly supported in this Committee. For all those reasons—and a whole load more which I could read out but would probably lose the Committee's interest—I think that these amendments are dangerous in terms of what the legislation seeks to achieve.

Lord Hanningfield: I should like to raise a point which I omitted to make earlier. One of the aspects of the process that local government most dislikes is that local government had to go through the process before there was legislation. It is like a creeping disease. I think that it demonstrates the executive's disregard. The legislation was considered in another place one or two months ago and it has now come to this House, but the CPA process has been under way for one year. We particularly dislike that aspect. If the Government want to change the way that they deal with local government, they should have the courtesy to discuss such proposals in both Houses before implementing them.

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The "excellent" and "good" authorities were already doing good work. I do not think that they have been changed at all by the CPA process. Perhaps we need to do something about the poorer authorities. Perhaps something can be done to help them. However, I do not think that the "excellent" and "good" authorities change very much.

Lord Bassam of Brighton: Perhaps I can rephrase the question. If you do not have a system of categorisation and measurement and do not operate forms of inspection, how will you know whether an authority is performing well? On such a basis you would have only a woolly construct whereby there was no obligation on the Audit Commission to perform a proper inspection and analysis of the local authority. There would be no obligation on the commission to produce reports and no system whereby you could analyse who is or is not doing well.

Lord Smith of Leigh: Before the noble Lord responds, may I just say that I think that there have been changes in local authorities placed in the "excellent" category and probably also in the "good" category? The process has given confidence and released a lot of creativity. We are beginning to think outside of the box and we are having a proper dialogue with government about how to change the relationship between local authorities and central government. That may currently be true of local authorities which are classed as excellent, but we hope that it will eventually be true of all local authorities. There have been some real changes, including change in the relationship between the Government and local government.

Lord Hanningfield: The Minister asked me a question. District councils have not yet been through the CPA process. However, without the CPA process we have identified many district councils that need help and support. The Audit Commission does that. I am involved in helping some district councils to improve. We do not need the CPA process to identify authorities that need help. We can do that through the processes that we already have. I say to the Minister that we can help authorities that need help without the CPA process. It is already happening.

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