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Lord Bassam of Brighton: This is an interesting grouping with two distinct sets of issues; one concerns the inspection regimes and the other systems of governance. It is an eclectic group.

I am not in sympathy with the substance of either of the amendments. The first one is flawed because, as I believe I said in an earlier discussion, tiers as a concept does not exist in statutory terms. While we expect the Audit Commission to categorise authorities—that will range from excellent to poor—it does not need to and may adopt some other formulation in the report it must provide to the Secretary of State under Clause 100(1).

Amendment No. 204 is designed to reduce inspections in the next two CPA categories classified as "excellent" by at least 50 per cent. However, we have announced that we want to see radical reductions—we have made it clear enough—in inspection activity for the best councils. The introduction of a risk-based approach to inspection should also lead to reductions for other councils in terms of the categorisation. We believe that that is best based on the strengths and weaknesses identified through the CPA process. We are moving towards what may be described as a more strategic inspection regime. I am sure that that is welcomed in local government and I recognise it as being a more valid way of proceeding.

I do not believe that there is much between the noble Baroness and ourselves about the value of external scrutiny in terms of driving up performance. That said, we recognise that unco-ordinated inspection activity can place unnecessary burdens on local authorities. That is why inspectorates are committed to a risk-based approach and are working through the Local Services Inspectorate Forum to deliver a co-ordinated

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and proportionate inspection programme. It needs to be put on the record that Ofsted, social services and, it goes without saying, the Audit Commission are signed up to that process, as I am sure the noble Baroness is well aware.

The forum is also developing a public database that will show inspection activity in each council by all the main inspectorates. That database is expected to go live in the next month. It will provide clear evidence of the co-ordinated activity of the inspectorates and the pattern of inspection by type of council and CPA category. I believe that that will be a useful tool for us to see a better pattern.

In our view Amendment No. 204 would replace this effective process with an unworkable and prescriptive approach. It is obvious that 50 per cent is a target in itself and I am not sure that it is the right target. I do not know what the right target is, but I believe that having a co-ordinated and a more strategic approach to inspection is a better way of operating.

We believe that it is right for the Government to set out a clear policy for risk-based and proportionate inspection programmes for local authorities. But it is also right that the inspectorates, with their statutory responsibilities and their necessary independence, should retain the flexibility to respond to the risks that they identify. That is much more difficult to do if one sets a target, because one is boxed in by its constraints.

Amendment No. 204C would amend Section 11 of the Local Government Act 2000 in order to remove the need for authorities classified as "excellent" or "good" to operate an executive form of governance. There is not a great deal of difference between the views of the noble Baroness and the Government on this. She recognises the importance of having an executive decision-making function at the heart of good local authorities. It is certainly the case that the better local authorities, prior to the 2000 Act, had an executive corps in operation.

The noble Baroness touches on one important issue—the role of back benchers in local authorities. There will always be grumbles by back benchers that they are excluded from making the main decisions—or certainly there always were in my time as a local authority leader—even though that was not actually the case. However, we need to make more use of all members, and the more streamlined structure does not preclude that possibility. In particular, back benchers have a very important role in scrutiny. They are very much the footsoldiers in representing their communities. Those two roles make for a very vibrant situation in most local authorities.

The new executive arrangements or streamlined committee systems introduced throughout the country enable us to have a better edge in creating more efficient, transparent and accountable local authorities. We do not support the idea, promoted by the amendment, of providing an opt-out arrangement for authorities that do not want the more streamlined approach. That would defeat the purpose of the reforms, which local authorities have in the main

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begun to implement, and would take us back to the days before we had streamlined and more executive functions in local government.

The proposal would also undermine the valuable improvements gained as a product of the changes. Although at the outset there were some complaints about elements of the new system, they have become much more accepted as they have begun to work through. The new political arrangements are linked inextricably to the work that authorities are doing to become more efficient and to provide the sort of political and community leadership that local authorities should provide. Moving backwards would be a retrograde step, which we and the consumers and customers of local authority services would regret. I believe that the noble Baroness shares that view, because I know that in her own party she has argued for modernising local government and for making it more accessible, accountable and understandable.

I hope that with those words of persuasion, the noble Baroness will not only withdraw today but also not press her amendments at a later stage.

Baroness Hanham: I thank the Minister for his reply. Like him, I was slightly bemused by the grouping. I know that I could have had a hand in de-coupling, but it somehow escaped my notice that the amendments had been placed together.

The main thrust of Amendment No. 204 is to try to ensure that, if CPAs mean anything, good local authorities in particular are let free to do what they need to do on the spot. There has been a real feeling of burden from the inspection regime that has been established. I am marginally encouraged by the Minister's suggestion that the regime is about to be rationalised—or at least that information will be taken on board about how many inspections there are against local authorities, and their outcomes. I am slightly encouraged by that, although I am not sure that I am encouraged enough to promise the Minister that he will never see this amendment again. However, I thank him for his explanation.

I did not expect to get any more than the response that I got to Amendment No. 204C. There has always been a difference of view on what modernisation of local government would bring about. There are still very real concerns about the magnificent powers of the few executive members and the rather paltry, if not non-existent, powers of back benchers. At least when a chairman had to consult members and ask for their support on a matter, they felt involved.

Noble Lords: Division!

Baroness Hanham: I suppose that noble Lords want me to stop.

Lord Bassam of Brighton: Or withdraw the amendment.

Baroness Hanham: No—I could spend a bit more time on the amendment and finish what I was going to say.

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[The Sitting was suspended for a Division in the House from 3.55 to 4.6 p.m.]

Baroness Hanham: I want to discuss a little further the matter of what back benchers on local authorities actually do and whether they see the current executive arrangements as beneficial to them. Although one might say that the back benchers do not much matter, they represent the future of local government. If they are not thoroughly involved in and committed to what is being done, then the following stages along the line of those who should become executive chairmen become far more difficult to recruit.

It is difficult for councillors to try to pretend that they are taking part in major decision-making when they are not doing so. Certainly, as they come into local authorities, one of the roles of back benchers is to play a part and ensure that what happens in their local area is something which they understand and can influence. However, some of the reports coming back from councils would suggest that back benchers are finding it quite hard to find for themselves a role.

Although I am not going to take the amendment any further, I might pursue it at a later stage. It has been designed to try to ensure that the maximum benefit is derived from those elected to serve on local authorities. Most authorities have at least 60 councillors, of whom 10 are executive members, while on most councils the same number again have a role to play, but not a decisive one. It is those people whom we need to be concerned about, not the executive members who are coining in handsome sums of money as leaders of their executive groups and who, as a consequence, may not be as bothered about the problem as I believe are others.

As I have said, I shall not take this any further today, but it is possible that I shall return to it at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 204A, 204B and 204C not moved.]

[Amendments Nos. 205 to 209 had been withdrawn from the Marshalled List.]

Clause 101 agreed to.

Schedule 3 agreed to.

Clause 102 [Staff transfer matters: general]:

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