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Clause 15(2) provides that an order or regulation related to structural or boundary change,

In plain English, that means that the law can be adapted to fit the new authorities; for example, by amending the membership of police authorities. The clause provides examples of provision that can be made as a part or a consequence of the order. I hope that helps the noble Baroness.

Perhaps I may say a few words about the amendments. Amendment No. 50 seeks to amend Clause 16, which enables public bodies to make agreements with respect to incidental measures. It will

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be necessary for public bodies to make more than one agreement. The precedent “from time to time”—which I think is the issue raised in the amendment—is set out in the Local Government Act 1992 so, again, it is a concept of practice which is well known. I hope that will reassure noble Lords.

Amendment No. 51 seeks to amend Clause 18, which provides for the establishment of staff commissions to facilitate the staffing arrangements in new local authorities. We have no intention or plans to establish new staff commissions, but the Bill allows the Secretary of State to give directions to any relevant authority affected by an order in respect of the payment of any expenses incurred by a staff commission in doing anything requested by the authority. Where expenses are not recovered from a relevant local authority, Clause 12 provides that these can be paid by the Secretary of State out of money provided by Parliament. It is a common-sense measure. Again, we have taken that precedent from the Local Government Act 1992, which allows staff commissions to be funded.

These provisions allow us to implement structural boundary changes in a way that follows long-established procedures. I am sure that noble Lords would not want to press their amendments as they would essentially undermine those procedures. I hope that with that explanation—

Lord Bruce-Lockhart: May I just ask the Minister whether the DCLG has given any thought to the classification of continuing authorities? Say two authorities are being merged. If one is a continuing authority, its staff do not have to be made redundant, which can make a continuing saving. But it could add certain core staff. Has consideration been given to that issue?

Baroness Andrews: This is part of the dialogue that we are having, both with local authorities themselves and I presume within the LGA as well. It is certainly a consideration and I will ensure that we will have that discussion.

Baroness Hanham: This has turned into an interesting debate. I have just one more question for the Minister. Local authorities have been changing and coming together and there have been reorganisations for many years. Do the provisions in this Bill appear in any other legislation as they are here, or are these changes to other legislation? I am not clear why they pop up under Clauses 7 or 10. In Clause 7, they are prevailing for the authorities that are about to come together. Are these provisions not laid out in other Local Government Acts? Are they completely new? If they are completely new, we ought to treat them with a great deal of detail because they have substantial powers of sorting out the liabilities, functions, property ownership, transfer of property, rights or liabilities. There is an enormous amount of function in here and they are clearly transitional arrangements. I wonder why they need to appear here. Perhaps they need to appear under an indication that they are part of another Act.

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Baroness Andrews: I am fairly certain that while they are specific to this Act, as I have explained, several of the elements of this are borrowed from the Local Government Act 1992. Most of the provisions are taken from there. We often debate in this House the merit of having issues on the face of Bills. It is important that we have this sort of thing on the face of the Bill so that we can discuss it. This is not the first time that we have had local government reorganisation; indeed, the 1992 Act is our master plan for this.

Baroness Hanham: I thank the Minister for her explanation.

Clause 14 agreed to.

Clause 15 agreed to.

Clause 16 [Agreements about incidental matters]:

Baroness Hanham moved Amendment No. 50:

The noble Baroness said: This is a very small amendment to Clause 16. It also gives us an opportunity to look at Clause 16, which continues the transitional arrangements and cheers itself up according to incidental matters that are again buried in here. I fully accept the Minister’s explanation about the provision being on the face of the Bill. That is extremely helpful, otherwise we would have to dig it out. I am not quite clear why “from time to time” appears. I imagine that these are, by and large, transitional arrangements that would be made—full stop. The amendment would just remove “from time to time” and I ask the Minister why those words are there. I beg to move.

4.45 pm

The Deputy Chairman of Committees (Lord Tordoff): I understood that Amendment No. 50 was spoken to with Amendment No. 8. It is entirely up to the noble Baroness to do what she wants with it.

Baroness Andrews: Thank God it is Thursday afternoon. I have inadvertently spoken to the amendment already, again by reference to our favourite Act—the Local Government Act 1992. The phrase appears there because it is necessary for public bodies to make more than one agreement in respect of incidental matters, including property, income and rights. The precedent of “from time to time” is set in that Act, so we need it in this Bill as well.

Baroness Hanham: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 agreed to.

Clause 17 agreed to.

Clause 18 [Staff commissions]:

[Amendment No. 51 not moved.]

Clause 18 agreed to.

Clause 19 agreed to.

Clause 20 [Correction of orders]:

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On Question, Whether Clause 20 shall stand part of the Bill?

Baroness Hanham: The clause suggests that the Secretary of State can make any corrections to an order. Does that apply just to a misprint, or to the wrong council, the wrong authority or the wrong date? How big a change can be made under the clause?

Baroness Andrews: I suppose that it is relative. The clause allows the Secretary of State to rectify a mistake in any order made under the chapter; for example, an order making a structural and/or boundary change, or an order containing incidental or consequential provision. If the original order contained a mistake—for example, an omission or incomplete information supplied by a local authority—the Secretary of State may correct it. Subsection (2) makes it clear that a “mistake” includes,

Where the Secretary of State makes an order under the provisions of this chapter, provisions of that order may take effect on the coming into force of the order and therefore, having taken effect, be spent. Were there to be an error or omission in one of the spent provisions of the order, the Secretary of State would be unable to address it through the normal provisions in the Interpretation Act 1978, which allow the Secretary of State certain powers to amend orders previously made. For example, if the order’s consequential provisions inadvertently included or omitted a parish council, which would be a serious omission, and we could not address it using the powers of the Interpretation Act 1978, we would use the powers in this clause to correct it.

I assure the Committee that it is not the Government’s intention to use the clause to change the order and depart from it, which would be a misuse. This is a common-sense provision, because we all know that errors or omissions are inevitable when orders are made within a tight timescale. There is a precedent for this. The previous Administration took similar powers under Section 26(6) of the Local Government Act 1992. The clause is a safeguard measure. I hope that noble Lords will be content with that explanation.

Baroness Hanham: I thank the Minister for that reply.

Clause 20 agreed to.

Clause 21 [Pre-commencement invitations etc]:

[Amendment No. 52 not moved.]

On Question, Whether Clause 21 shall stand part of the Bill?

Baroness Hanham: It has been rather a surreal debate this afternoon, because for at least two-thirds of it we have been discussing action that has predated the legislation. Clause 21 gives more detail on that. It

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permits the Secretary of State to invite authorities to restructure before the Bill is itself enacted: we are discussing a clause giving her the power to undertake what she is already doing. The reality is that if the Secretary of State is not acting against the law, she is certainly not within the law, as the law does not exist. We are taking legislation through Parliament simply to justify actions that she is already undertaking.

There is nothing to stop the Secretary of State from amending this Bill as she goes along to best fit the law to her purposes. Earlier government amendments seem to do just that, narrowing the consultation process. I cannot see why the Government have chosen to include this part of the Bill, given that the Secretary of State is simply going on with the plans regardless. This part of the Bill is simply an exercise in formality; it is little more than a withdrawal from parliamentary proceedings to expect both Houses merely to rubber-stamp practices that are going on elsewhere. In a sense, we can guarantee that anything we have debated in Committee today will not be taken away and looked at, because the Secretary of State is already operating under these draft criteria that have not been agreed.

As I said at the outset, we are debating this legislation with our hands tied behind our back. I do not know why the Government have decided to legislate in this way, much as I cannot see why your Lordships are expected to sanction it. Nevertheless, it is important that the Minister clarifies Clause 21. I would be grateful if, in doing so, she could say what steps would be taken if the Secretary of State were, for example, to name a local authority, only to have the power to do so removed from this Bill. This is quite plainly retrospective legislation, even though the Minister has said that it comes within powers already in the Secretary of State’s hands. I am prepared to hear the Government’s case, but I feel uneasy about how this has been presented. Clause 21 does not make me feel any better.

Baroness Andrews: I hope that I can reassure the noble Baroness, because there is really nothing perverse or sinister about this clause. It just provides that if, before the commencement of Chapter 1 of Part 1 of the Bill—provisions that relate to structural and boundary change—the Secretary of State issues an invitation, or guidance, or receives or consults on proposals received, she can implement such proposals after commencement of this part.

This clause will simply allow us to implement the proposals received in response to the invitation that we issued last October, and which we judge as meeting the criteria to proceed towards implementation. In our second debate today, I went to some pains to assure the noble Baroness that there was nothing retrospective about this clause. It in no way validates or seeks to make lawful things that, before the Bill’s enactment, were not valid or lawful. Yet it has enabled us to undertake the process of invitation and consultation in parallel with the passage of the Bill through Parliament.

As I explained, we were warmly encouraged by local authorities to make this process as painless and

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speedy as possible, and this clause was one way of helping us to do that. It has to be done quickly to minimise the period of uncertainty in any area, or periods when there is sharp contention and debate about the best way forward. It is pragmatic in minimising the scope for potential disruption to local services and effective local leadership. Again, Clause 21 enables us to keep as short as possible the process of restructuring while getting it right.

If Clause 21 were removed not only would we have failed in that aim, but I am afraid that we would also have rendered pointless all the activity and effort that councillors up and down the country have devoted to developing and seeking to take forward their unitary proposals, which they feel strongly are in the interests of their local communities. I hope that the noble Baroness is satisfied with that explanation.

Baroness Hanham: The Minister keeps talking about local authorities up and down the country. Let us be very specific about this: we are talking about 16 or possibly eight local authorities. There is an awful lot of legislation going on for a very limited number. We are not talking about great swathes of local authorities, so we do not want to get too carried away.

Clause 21 agreed to.

Clause 22 agreed to.

Clause 23 [Definitions for purposes of Chapter 1]:

[Amendments Nos. 53 to 57 not moved.]

Clause 23 agreed to.

Clause 24 [Authorities dissolved by orders: control of disposals, contracts and reserves]:

Baroness Hanham moved Amendment No. 58:

The noble Baroness said: I wish also to speak to the Questions whether Clauses 24, 25 and 26 shall stand part of the Bill and to Amendments Nos. 59 and 60. This is a group of probing amendments that will, I hope, allow us to clarify the function of these clauses.

Clauses 24, 25 and 26 provide for the transitional arrangements between councils, which I am sure are all well in order. However, I have a few concerns about the thresholds established in Clause 24. The clause allows the Secretary of State to direct that an authority may dispose of land if it is worth less than £100,000, enter into a capital contract which is worth less than £1 million or enter into a non-capital contract worth less than £100,000. The clause is expressed in negative terms so the Secretary of State can direct a relevant authority not to enter into such contracts above those thresholds—but these are simply two sides to the same coin.

It was my initial concern that such a direction could supersede existing contract law—though I am no expert in contract law—and create extremely difficult situations for those who enter into contracts with authorities that are ongoing. While I cannot

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believe that this could actually be the case, I would be grateful to the Minister if she could set out on the record the safeguards, however well hidden, in this clause.

Clauses 25 and 26 are consequential on Clause 24 and, if that clause can be shown to be in order, I would be content not to press the Questions whether they should stand part.

Amendments Nos. 59 and 60 go hand in hand; they perform a double function. First, they would uphold the principle in our earlier debate that activity under the legislation should not anticipate its passage by the House. Secondly, they would provide local authorities and those taking out contracts with a little more flexibility in the negotiating process. It has been pointed out that decision-making froze in the 26 local authorities that tabled bids. Nobody knows which bids will be accepted and, in the interim, local authorities are in a hiatus. Amendments Nos. 59 and 60 would simply allow local authorities flexibility to make their own decisions in the coming months while giving them the certainty that if their bids are not to be accepted they may simply continue as before. Those amendments also prevent this law applying retrospectively to any contracts or investments that authorities may have made.

While the clause stand part Questions in this group are probing, Amendments Nos. 59 and 60 simply express a reasonable wish to give local authorities beneficial certainty about their situation, and flexibility and freedom in their negotiations. I beg to move.

Baroness Andrews: Removing the clauses would take away a very important safeguard of the interests of new authorities and, much more importantly, the interests of council tax payers in areas being restructured. I am sure that noble Lords opposite are not prepared to see council tax payers burdened by irresponsible decisions of councils that are to be abolished through restructuring, which is what the clause attempts to prevent.

We would all like to think that there would be no such councils. The idea is that everyone involved in restructuring would work together to ensure that change is smooth and efficient and that all decisions fully safeguard the position of those who will be responsible in future for delivering services and leading local communities. Like noble Lords opposite, I wish that that was achievable without having these clauses in the Bill.

5 pm

I agree that these clauses, which restrict what councils can do in certain circumstances, are not devolutionary, but sadly I believe they are necessary if our greater devolutionary aim of allowing councils to seek unitary structures is to enable them to deliver in full the benefits to council tax payers and service users. It would be reckless to think they were not necessary and to try to remove them, because sadly there are many examples from previous rounds of restructuring where authorities to be dissolved acted irresponsibly over

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assets, disposals and contracts. The clauses would safeguard against that. Their purpose is simply to ensure that councils that are to be dissolved do not dispose of valuable lands, enter into long-term contracts or apply financial reserves to reduce council tax above a limit that may be specified by the Secretary of State. All those things would have a negative effect on any new authority.

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