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Amendment, by leave, withdrawn,

The Deputy Chairman of Committees (Lord Tordoff): I know that I am not allowed to join in the debate, but as a recent elector in Enfield, I found what was said interesting.

[Amendment No. 44 not moved.]

Clause 11 agreed to.

Clause 12 [Provision relating to membership etc of authorities]:

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Baroness Andrews moved Amendments Nos. 45 and 46:

On Question, amendments agreed to.

The Deputy Chairman of Committees: In calling Amendment No. 47, I have to point out to the Committee that were it to be agreed to, I should not be able to call Amendments Nos. 48 and 49 because of pre-emption.

Baroness Scott of Needham Market moved Amendment No. 47:

The noble Baroness said: We are making a huge leap forward to Clause 12. Amendments Nos. 47 and 49 follow on from the previous debate, in that they relate to the governance arrangements that will emerge for the councils which come out of reorganisation either as shadow authorities or as wholly new councils. The amendments have been tabled to seek clarification from the Government about their intentions for the executive structures of the new bodies. It appears to us that under the Bill, it is for the Secretary of State to decide on the model of the executive of the new council. Can she confirm that?

It is also not clear how it will be decided which model of governance is deemed to be suitable. A new unitary council could be brought out of councils that previously had a variety of governance arrangements—they may have had a leader or a mayor, or a small authority may have kept the old committee system. The amendments have been tabled to seek clarification from the Minister about whether the Secretary of State will decide and what criteria will be used to determine the model of governance to be used in future. I beg to move.

Baroness Andrews: Before I address that question, I will briefly say something for the record about the effects of the amendments. They would have the serious consequence of preventing the Secretary of State from ensuring that new authorities can begin operating at the earliest opportunity after decisions have been made by preventing the election of key officers. I am sure that the noble Baroness would not want that.

For a local authority to begin operating, obviously it needs its councillors in place. Clause 12(1)(j) allows the Secretary of State to appoint existing councillors to the new authority with a democratic mandate provided by their election from the ward or division of an existing authority. Clause 12 also makes clear that those appointments are only for a transitional period until elections can be held. Following the order that will bring the new authority into being, the Electoral Commission will be under a duty to consider whether an electoral review should be conducted to require new electoral arrangements for a new authority. That is in Clause 12(5).

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Amendment No. 49 also removes the Secretary of State's power to provide within the order for the executive arrangements for the authority, which brings us to some of the questions raised by the noble Baroness. The amendment proposes that the executive arrangements for new authorities should be carried over from existing authorities, but that is hardly sensible when we are looking to a fresh start for a new local authority. It is much more desirable, not to say democratic, for the local authority that is proposing the creation of a new authority also to propose the executive arrangements.

I am sure that the noble Baroness is looking forward enormously, as I am, to Part 3. We will then have the opportunity to discuss the nature of leadership, its scope and the models that have been proposed. I do not want to anticipate that debate, but essentially, on the basis of evidence and common sense and given the growing responsibility of local authorities for place making, what people want in order to engage with local government is a leader who is visible and clearly accountable and a local council with a clear set of responsibilities. We have set out a range of models from which local authorities can choose. We have done so deliberately, because what they have in common is all being built around notions of strong leadership, strong executive powers and stability within a four-year term. We are not imposing the model: there is a limited choice of models and we will be debating that when we come to Part 3 of the Bill.

4.15 pm

Baroness Scott of Needham Market: I am grateful to the noble Baroness. I would not want to pre-empt the excitement in Part 3 next week. The general approach of the Government seems to be the old Henry Ford approach: you can have any model you like so long as it is black. In the case of the arrangements, you can have any model you like so long as it is a mayor or a strong leader. We have that joy to come.

Lord Greaves: Before my noble friend withdraws her amendment, I would like to say one or two things. I do not want to start talking about leadership models at this stage, even though the Minister tempted us to do so, because we will be having some exciting discussions about that next week, I hope.

I have three points. First, the Government have got themselves into a mess over the question of the electoral arrangements for the new authorities, because the electoral arrangements depend on the leadership model that is chosen and so have to be decided before the authority is elected. There is a democratic paradox here: the people getting elected to the authority might have strong views about which model they want, but they will not be able to campaign on that—to get elected or not elected on that basis—because the decision will already have been made. For example, if people do not want a mayor but it has been decided to have a mayor, they will be lumbered with one whether they like it or not. My question is whether the time limit on changing from one set of executive arrangements to another set

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of executive arrangements—somewhere else in the Bill—applies to the new authority. Will a new authority, once elected, be able to change its executive arrangements within its first period of office? That would seem to be the best possible democratic compromise under what is a fairly unsatisfactory situation. That is my first question.

Secondly—actually, I think that I have four questions—if a new unitary authority is to be elected as a result of the invitations being sent out and the decisions currently being made, how will the decision be made about which executive model is to be chosen? Will it be on the basis of the bid that has been made and what the authority or authorities putting forward the unitary authority proposal have said that they would like? As I understand it, at least some of them have set out in great deal the models of government and so on, because they have to do it. Alternatively, will the Secretary of State say, “No, you want this system, but you are not going to have it. Sorry, you are going to have something different”? That is my second question: is there a presumption that it will be on the basis of the bids being put in?

Thirdly, the Minister was concerned about the amendment removing Clause 12(1)(j), which is about,

That is not, in my understanding, what the Government have been telling local authorities will happen. They have been saying that decisions will be made by November this year, that the proposals for which ones can go forward from whatever phase we are in at the moment will be made at the end of July and that the affirmative instruments for creating the new authorities will go through Parliament in November with elections next May. The new authorities will then come into being straightaway and take over after a transitional 12 months. That is my understanding.

In that situation, I do not understand during which period appointed councillors will be needed. If there are to be appointed councillors in, for example, a unitary authority such as Shropshire, to pick one at random—where there are five districts and the proposals are to double the size of the county council to around 90, which would still be less than half the number of councillors currently on the district and county councils—who is going to choose which of those councillors should be appointed? Who is going to look at those councils? Is the Secretary of State going to say, “Ah, we’ve got Shrewsbury Council; I’ll have these people, but I won’t have those people”? This seems an anomalous process. Can the Minister explain what this business of appointed councils is all about, under what circumstances it would be necessary and how on Earth the Secretary of State would choose which ones were worthy of being on the new authority and which were to be said goodbye to?

Baroness Andrews: The noble Lord has asked some quite detailed questions about the process. It is worth saying that he is right that all the proposals currently being considered contained proposals for the

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executive arrangements. The invitation that we issued in October last year specifically required proposals for new unitaries to include proposals for new leadership models. It is therefore obviously right that local authorities can put forward proposals rather than inheriting a leadership model from a previous council. That will answer the noble Lord’s second point.

The order setting up the new authority will specify the form of the executive. If that is subsequently changed and the council has a change of heart, the Part 3 provisions will apply. The authority would have to go through the process set out in Part 3 for when a council subsequently decides to change its arrangements. That is just part of the natural process.

The noble Lord is right about the timetable. It will roll out through May next year, with the councils coming into force in May 2009. The councillors appointed for the transitional period will be put in place between the coming into force of the order and the subsequent elections in May. I do not know the answer to the noble Lord’s questions about the specific detail of those processes, so I will have to write to him about how that will be done. These things and, naturally enough, their implementation are being discussed now. I talked earlier about conversations that have been held with the Local Government Association and so on about transitional arrangements. These are the sorts of things that will be discussed.

Lord Greaves: To pursue this point a little further, I am astonished that people think that there is a need for a transitional council between this coming November and next May, when there will be elections. I am not sure what it would do. Would it be set up with executive arrangements? Would it have a leader? Would there be all appointed councillors? This seems a totally unnecessary process.

The noble Lord, Lord Graham of Edmonton, recounted his experiences from 1963. I am glad that I cannot go back that far, but I remember the 1972 local government reorganisation when I was a member of Colne Borough Council, which was one of seven authorities coming together to form the new Pendle Borough Council. It was really quite complicated. After the passing of the 1972 Act and the elections for the new council in June 1973, perfectly adequate arrangements were in place. A committee of representatives from each of the existing councils was set up, which met to plan whatever sensible things needed to be planned. These things were not huge, but they had to be discussed at the time.

Between June 1973 and 1 April 1974, when the new authority took over, a new council was put in place, and there were 11 months in which to do it. This time there will be 12 months. All the important decisions that need to be made can be made during those 12 months. The idea of an appointed transitional council is an over-complication, which will cause real problems. The Government would be well advised to drop this and to think seriously about simply having a sensible meeting of representatives from the councils coming together.

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Baroness Andrews: I have listened closely to the noble Lord, who has had a lot of experience on these things. Essentially, we need to ensure that in the transition period a body of councillors is charged with overseeing the preparatory work. This clause allows us to make use of an existing body of councillors or to elect or appoint a body of councillors specifically to take over the necessary preparations. When I write to the noble Baroness with the details, we will set out some of those considerations. It is important to build in flexibility to ensure that individual circumstances are tailored to each locality. This approach has been welcomed by local government and by the stakeholders, because clearly it is a pragmatic process, which we hope will work. In the period ahead of the first elections to a shadow authority, the order setting up the new authority could, for example, empower the Secretary of State to appoint the leaders of each of the old authorities. Clearly, a number of different things could be done.

Baroness Hamwee: My noble friend’s questions have been helpful in disaggregating quite a package. In this clause, I found it difficult to understand what was about transitional arrangements, what were shadow arrangements and where those two overlapped. If possible, when the Minister writes it would be very helpful to have some of the information in the form of a flow chart that one could follow through to see what steps will be taken at any given time. Perhaps I may add a comment to that request. Some of the answers that the Minister gave to my noble friend were in terms of the current invitations in the current round, but there may be broader issues than can be answered just by using the immediate examples.

Baroness Scott of Needham Market: I was just about to withdraw the amendment when my noble friend intervened, but it was well worth it. We will have to await the letter from the Minister, which will guide us on how we progress this rather complex issue on Report. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Andrews moved Amendment No. 48:

On Question, amendment agreed to.

[Amendment No. 49 not moved.]

Clause 12, as amended, agreed to.

Clause 13 agreed to.

4.30 pm

Clause 14 [Regulations for supplementing orders]:

On Question, Whether Clause 14 shall stand part of the Bill?

Baroness Hanham: In light of the discussions we have had over this section, I am very glad that I disaggregated these clauses. Now that I am clearer

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that Clause 7 applies to those authorities that have been invited to apply and Clause 10 applies en général to any authorities that decide that they want in wider terms to rearrange their affairs, that brings us to Clauses 14 and 15 affecting both, not just the authorities listed under Clause 2. Clause 14 has to be read with Clause 15, because Clause 15 relates to it and Clause 14(2) says that Clause 14(1) has to be read with Clause 15.

We need to try and pick out, particularly in relation to Clause 7, how many of these transitional arrangements are already being canvassed and how much it is considered that they ought to be put in hand now, even before the orders have been laid, or whether they can be left for six months until the orders have been confirmed and the legislation has been approved. So under Clauses 14 and 15—we can discuss Clauses 16 and 17 separately but they are about the same thing—how can we establish what has been done in the name of Clause 7 and what has been done in the name of Clause 10? Clause 10 is a wider and less dated clause but, under Clauses 14 and 15, the processes could start at any time for any of the authorities being considered. In light of the way this legislation is going, they have probably started already. Could the Minister give an overview on Clauses 14 and 15?

Lord Bruce-Lockhart: As the noble Baroness, Lady Hanham, links Clauses 14 and 15, could I just question the transitional arrangements? These include such things as, in Clause 15(1)(d), the transfer of staff compensation for loss of office. I have the greatest admiration for people who work in local government across the country. They are immensely professional, work very hard, are of great integrity and have a real commitment to public service. Having said that, my experience is that these transitions can be extremely expensive for council tax payers.

Does having this provision mean that there are going to be new regulations which go beyond, above or below the standard terms and conditions that we already have? As the noble Baroness knows, local government already has issues of recruitment and retention. There are issues of whether we can retain people against the private sector and against the rest of the public sector—local government retires at 65, and the rest of the public sector retires at 60. Certainly in previous reorganisations, the arrangements were such that staff had to be made redundant from one authority before transferring to another. The terms attached to that were extremely generous and the transfer arrangements did not always work out in the best interests of council tax payers. We need absolute clarity on this issue and I come back to my main point: why is this issue here when we already have standard conditions across the country? Are conditions going to be more generous? Are they going to be less generous? How is it going to work?

Baroness Andrews: I will take noble Lords through what Clauses 14 and 15 actually do. I hope that will answer the questions the noble Lord has raised. I will refer to the amendments because I think that might shed a little light on some of those questions.

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Essentially, Clause 14—“Regulations for supplementing orders”—is a technical clause which allows the Secretary of State to make provision by regulations for incidental, consequential, transitional or supplementary purposes as a consequence of an order under Clauses 7 or 10 for structural and/or boundary change. Such provisions may include those outlined in Clause 15—I shall come to those in a minute. However, although it is a technical matter, the Secretary of State will provide in the individual restructuring orders for matters specific to each area—for example, the number of councillors.

This power to make regulations will be used to make overarching regulations which are applicable to all structured areas as well, and may deal with common matters. This might involve, for example, general modifications needed to primary legislation regarding financial matters and so on. So there are two types of potential regulations. Essentially, all that Clause 14 does is enable the making of those kinds of regulations.

While Clauses 13 and 14 allow the Secretary of State to make those incidental and consequential regulations, Clause 15 outlines what those provisions may include. They may include provision for the transfer of function, property rights or liabilities from a local authority or police authority for any area to another local authority or police authority whose area consists of or includes the whole or a part of the area. They also make arrangements for the transfer of staff, compensation for loss of office, pensions and other staffing matters. Obviously I do not need to tell the noble Lord that these provisions are essential to enable the transfer of functions and responsibilities from an old authority that will be dissolved under an order to the new authority. As the noble Lord said, it is important for that transition to be as smooth and with as little disruption as possible.

What terms and conditions will apply to staff transferring is a matter on which discussions are being started with the LGA, the trade unions and other parties. No decisions have yet been taken but this clearly will develop in the course of the conversations that will be had, especially after the end of this month. I shall certainly keep the noble Lord informed about that. Once decisions are taken, they will be reflected in the orders and regulations under the Bill. The process will be transparent and follow the normal practice. That will happen once the Bill is enacted.

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