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Clause 79, taken with Schedule 6, will release eligible parish councils from these constraints, including the financial ones, giving them broad powers to promote the social, economic and environmental well-being of their areas, and to commit their council tax payers to such expenditure as they see fit. That means that they will have powers broadly equivalent with regard to well-being as the principal authorities.

Obviously, it is an extremely valuable power and it has been welcomed. It signifies the importance and trust we place in parish councils and the expectations

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that we have of them for all the reasons that we discussed earlier. But the breadth of the power will also mean that they will need to spend less time investigating whether some proposed action falls within the “direct benefit” test. To take one example, they may decide to support more extensive youth activities. They may wish to take part in joint ventures with community groups. They may want to spend money on publicity or to underpin the efforts of others by providing financial guarantees. Of course, they can use it wherever they currently rely on Section 137—a typical example being where a parish wishes to contribute to the expenditure of another local authority.

The power of well-being is potentially very broad, but we have not sought to constrain it by placing statutory limits on eligible parishes’ expenditure, nor by taking capping powers. In the light of that, we are convinced that it would be prudent to have some safeguards in place. As Committee Members have already said, parish councils vary enormously in size, ambition and competence. So we have to have some test to ensure that those who exercise this new power, which is potentially very considerable, have the capacity and competencies that they need to do so knowledgably and effectively. That is why we include the notion of eligibility.

What do we mean by “eligibility”? The local government White Paper said that eligibility would be based on that for the non-statutory quality parish scheme, which is a good starting point. We are in the process of doing that, with the help of the Local Government Association, the National Association of Local Councils, the Society of Local Council Clerks and others. We have made available to the House a statement of intent about this—and if the noble Baroness, Lady Hanham, has not seen it, I shall make sure that she has it. In brief, the quality parish scheme provides for tests of criteria for electoral mandate; qualifications of the clerk; the numbers of council meetings; the nature of communication that is used in relation to the constituency; the production of an annual report; proper accountability; and an ethical framework.

We are not using those tests en bloc, because that would not be appropriate for what this money and new competence could be used for. We intend to draw from those tests a set of conditions against which a parish council will be able to assess itself and decide whether it is eligible to use the well-being power at the time when it contemplates using it—because it will be ad hoc in the sense that a council will want to engage in a particular project, activity or initiative. It is a sort of non-statutory kite mark, awarded for a period of years by an independent peer group, but it will enable everyone to have some notion of competence. However, it is definitely not about arbitrarily limiting the number of parish councils that can use the well-being power. It is simply about ensuring that these powers are exercised sensibly.

I hope that after that description the noble Baroness will agree that we have to have safeguards, not least because we must ensure that the local

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inhabitants are not necessarily made vulnerable to potentially—and perhaps sometimes accidentally—unwise decisions.

Lord Greaves: I apologise that I did not jump in before the Minister rose to speak to my Amendment No. 204, but my excuse is that I had my head deep in the very useful letter on community governance that she wrote to us last week, and I was so engrossed with that that I missed my chance.

Amendment No. 204 is about community strategies, which are put in place by the district council. The Government’s proposed legislation says that eligible parish councils should take note of the community strategy when they are working out and using their powers of well-being. The purpose of Amendment No. 204 is to say that in turn the district council should consult eligible parish councils when putting together its community strategies, since the parish council has to have regard to them when exercising its powers of well-being.

Baroness Andrews: I do not think that the amendment is necessary because Section 4 of the Local Government Act 2000 already requires any local authority, when preparing or modifying its community strategy, to,

and to have regard to guidance.

There is guidance on this already. Under it, the principal authorities need to ensure that the tiers above and below are appropriately involved and consider the involvement of neighbouring authorities. It goes on to say that parish and town councils should be able to play a significant role in reflecting the priorities of their local communities, because they are the democratic bodies with the closest links. The guidance recognises that such local councils can play an important role in helping to implement elements of the strategy. Because capacity varies from council to council, it suggests that the role that parish and town councils play should be a matter for local discussion with the relevant local strategic partnerships.

We question whether adding this new provision, which requires consultation only with some parish councils, would add any value. It would probably rather restrict the process. There are other drafting problems with the amendment, which I shall not go into at the moment.

Lord Greaves: At this time of night I am not interested in drafting problems; I am interested in the substantive point. I am very grateful to the Minister for her reply.

Baroness Hanham: I, too, am grateful, but I have a final question for the Minister. I understand that under the quality parish council scheme only about 3 per cent of parish councils would qualify to become eligible councils. That will not leave very many councils able to fulfil the great expansiveness that she is suggesting might be available to them. The National Association of Local Councils is hoping to

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see the criteria expanded in a way that would increase that percentage, otherwise this will be a pretty hollow concession to parish councils. I hope that the Minister will comment on how few are likely to be able to make use of this.

Baroness Andrews: The noble Baroness is quite right; the figure is about 400 at the moment. Our best guess is that about 1,000 could fulfil the criteria being employed more flexibly. However, as I said, we are in discussion with the key bodies. I can see that the measure could be a route to quality status because it will certainly act as an incentive for parishes to get their act together. As I say, I think that many more could join as quality parish councils but we cannot sensibly posit a figure at the moment.

Baroness Hanham: I am grateful to the Minister for that reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 202 not moved.]

Clause 79 agreed to.

Baroness Scott of Needham Market moved Amendment No. 203:

(a) in respect of membership of a company incorporated under the Companies Act 2006 (c. 46);(b) in respect of membership of an association of local authorities; or(c) to a voluntary organisation operating in its area.

The noble Baroness said: In many senses Amendment No. 203 follows on from the amendments tabled by the noble Baroness, Lady Hanham, in that it concerns the ability of parish councils to issue financial guarantees. At the moment, only parish councils that pass the threshold test for councils eligible for the power of well-being set by the Government can issue guarantees. The National Association of Local Councils would like to see that ability extended to all parish councils. If it does not have such a power, a parish council would not, for example, be able to participate in joint arrangements involving a company limited by guarantee. In practical terms this would mean that it might not be able to participate in regeneration bodies, citizens advice bureaux consortia and other non-governmental consortia. On a much more local traditional basis, if parish councils have the power to issue a guarantee they might be able to underwrite the village fete or the local cricket club. I can see why the National Association of Local Councils sees this as an important issue. Certainly from my experience of rural parish councils, I think that the measure would be very helpful. I beg to move.

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Baroness Hanham: I am happy to support this amendment. As the noble Baroness, Lady Scott, said, it is very much along the lines of the previous amendment and concerns eligibility to promote the power of well-being and issue financial guarantees, and whether that will be sufficient to make this a worthwhile concession or provision.

Baroness Andrews: We have some sympathy with the underlying aim of the proposed new clause, which was debated in another place at several stages of the Bill. However, we have doubts about whether it is necessary. As the noble Baroness said, under the notion of eligibility which we have just discussed, it would certainly empower parish councils to enter into guarantees if to do so would contribute to the economic, social or environmental well-being of the area. That is an important development, and there is no legally imposed limit on the value of such guarantees. The new clause is superfluous when it comes to those.

9.45 pm

It is reasonable that the Committee should want to consider whether an additional measure is needed and whether the proposed new clause is adequate. During the long national debate that took place before we framed the proposals to modernise the law relating to parish councils, this issue hardly surfaced. There was no strong groundswell in favour of addressing the power to issue guarantees, which may be because all parish councils already have some scope to provide them. Under Section 137 of the Local Government Act, a parish council can provide guarantees for a voluntary organisation operating in its area. I know that it is limited to the amount per local government elector of £5.64 per annum, and it could not guarantee very large sums, but it might do the village fete or the local cricket club. The power is there.

There is also additional capacity in Section 111 of the Local Government Act 1972, which is a power for local authorities to do anything that is calculated to facilitate or is conducive or incidental to the discharge of any of their functions. I am advised that it provides an implied power for councils, including parishes, to set up companies that could be limited by guarantee. I am sorry to say that I do not think there is a compelling case. Parishes seem to be getting along pretty well without it, and on that basis I have to resist the amendment.

Baroness Scott of Needham Market: I am grateful to the noble Baroness for her comments. I am sure that the National Association of Local Councils will take a good look at what she said and reflect on it, because I am not entirely clear that the provisions to which she referred are widely understood by the parish council community. I thank her, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 80 [Community strategies]:

[Amendments Nos. 203A to 204B not moved.]

[Amendment No. 204C had been withdrawn from the Marshalled List.]

Clause 80 agreed to.

Clause 81 [Community governance reviews]:

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Lord Greaves moved Amendment No. 204CA:

(a) the Secretary of State may by agreement with the council continue to deal with the parish review under the provisions of Part II of the Local Government and Rating Act 1997, and the provisions of that Part shall continue to apply for the purposes of that review, or(b) in any other case the Secretary of State shall send the parish review back to the council to be dealt with as a community governance review under this section.(a) the Secretary of State may by agreement with the council continue to deal with the petition under the provisions of Part II of the Local Government and Rating Act 1997, and the provisions of that Part shall continue to apply for the purposes of that review, or(b) in any other case the Secretary of State shall send the petition back to the council to be dealt with as a community governance petition under section 82 of this Act.”

The noble Lord said: The amendment probes the Government’s intentions in relation to those district councils that have pending parish reviews under the existing legislation and how they are going to deal with those parish reviews in view of the proposed changes to community governance reviews, which can be carried out by district councils themselves. The Government are making a welcome change from having to have the parish reviews approved by the Secretary of State towards a system in which district councils can do their own parish reviews under the regulations. That is welcome; it is a small act of devolution and we should recognise that. It is not a major shift of power from the centre to the localities, but it is a useful small shift, and would that there were far more of them in the Bill.

I declare a specific interest as a member of Pendle Borough Council, which has a pending parish review, which initially instigated my interest. I asked the noble Baroness, Lady Andrews, a question, and she very helpfully replied that there are 41 outstanding parish reviews with the Secretary of State at the moment, ranging across the country in alphabetical order from Alnwick to York. Interestingly, in view of our previous discussions, that includes Birmingham and Leeds, although I do not know how substantial their reviews are. The list includes Pendle.

The details of the amendment are not that important, in a sense, although I shall outline them briefly. My suggestion is that if, when this clause comes into effect, any parish reviews remain with the Secretary of State, he and the district council concerned can come to an agreement that he either continues to deal with the matter under the existing legislation for the purpose of that review, or sends it back to be dealt with by the district. Those seem to be the two options if any parish reviews remain to be

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dealt with. The amendment refers to parish reviews—some may be parish petitions independent of requests for a parish council. I do not know whether any of the 41 reviews listed by the noble Baroness in her Written Answer is a petition. That does not really matter.

The underlying question is whether the Government can give a commitment that they will have cleared all outstanding parish reviews and petitions before the Bill is enacted, and if so, when. Secondly, I wish to know whether the Government believe that any of the reviews submitted in the hope of elections to set up new parish councils next May will be dealt with in time. My specific question is a Pendle question because, as I have said, we want to set up town councils in Nelson and Colne and complete the parishing of the borough. That is incidental to my general question and proposal. I beg to move.

Baroness Crawley: The amendment of the noble Lord, Lord Greaves, would put into place transitional arrangements to allow decisions to be taken on parish reviews or petition cases that have been submitted to the Secretary of State under the provisions of Part II of the Local Government and Rating Act 1997, but on which no decision has been taken or orders made before this chapter comes into effect.

Currently, local authorities conduct parish reviews and put their recommendations for the creation, alteration or abolition of parish councils to the Secretary of State and put proposals for electoral arrangements of parish councils to the Electoral Commission. Local government electors can petition for change through their principal council, but can petition for the creation of a parish only in a wholly unparished area. Petitions must be submitted to the Secretary of State, together with the views of the appropriate district council, including whether or not it agrees with the proposals. Decisions are then taken by the Secretary of State and the Electoral Commission, and the necessary implementation orders are made.

Chapter 3 of Part 4 devolves decision-making powers to local government, whereby the Secretary of State and the Electoral Commission no longer have a role, as the noble Lord, Lord Greaves, explained. Community governance reviews will be undertaken by principal councils and petitions will trigger a community governance review by the principal authority.

The Government recognise, however, that a number of reviews and petitions have been put forward under the provisions of the 1997 Act on which they have yet to take decisions, as the noble Lord pointed out, and are currently considering whether transitional arrangements will be needed to deal with these cases and, if so, what form they should take. For this reason, I ask the noble Lord to withdraw his amendment, because we will certainly give further consideration to the issue of transitional arrangements. The noble Lord has a point and we will take this matter away and look at it. We cannot give a commitment that the parish reviews will have been completed.

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Lord Greaves: I am grateful for that. All I can ask is when we come back after the Summer Recess the Government will have thought about how they will deal with it and will be able to tell us. I hope that I will not then feel the need to detain the House on Report or Third Reading on this matter. I am grateful for that reply. I suppose that I should put in a plug to say, “Please do Pendle’s”, but I am sure that that would be out of order. Nevertheless, I said it. I thank the noble Baroness, Lady Crawley. May I ask if she can come again? I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 81 agreed to.

Clauses 82 to 85 agreed to.

Clause 86 [Review being undertaken: duty to respond to petition]:

Lord Greaves moved Amendment No. 204CB:

The noble Lord said: The amendment heads a group with other amendments in my name. They are all minor matters so I shall be brief. Amendment No. 204CB draws the Committee’s attention to the fact that I do not think that subsection (1) makes sense. If it does, perhaps someone can explain how. It is about circumstances in which “a community governance review” is being undertaken in part of a district, and,

Subsection (1)(b) states that,

which is somewhere either in the whole or part of the district. Subsection (1)(c) states that,

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