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4.15 pm

Lord Graham of Edmonton: My Lords, I am interested in the genesis of the amendment. I am aware of leaders of the majority party who have lost the confidence of their group as a result of bad performance and who have been changed by its members. It has been within their power to do that. The amendment would diminish the ability of the party system to continue to govern the situation. The noble Lord, Lord Greaves, shakes his head, but I fail to see how the amendment would strengthen the present situation. The raison d’ĂȘtre of the Bill is to create a system of strong leadership, by people who are able, endorsed and competent, carrying out the will of the people. Power comes to the leader through the grassroots of his party. I do not argue against the noble Lord, but I am puzzled by why he thinks that the present system, which allows complete freedom to each party and each council to do as they wish, is unsatisfactory.

Lord Greaves: My Lords, the noble Lord is completely wrong in his reading of the Bill. If it is enacted in its present form, and if a leader of a council who is the leader of the majority group is elected for four years, and if the majority group on the council loses confidence in the leader halfway through, it will be unable to remove him if he does

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not want to go, unless it can get a motion to remove him through the council, which it may not be able to do. If one of us was leader of the majority group and we had fallen out with our own group and joined forces with the opposition, the opposition might keep us in office and refuse a vote of no confidence. The only way in which the majority group could remove its leader within the four years would be either by persuading that person to resign, which they might not do, or by moving a vote of no confidence in them at a council meeting. Expecting a majority group to move a vote of no confidence in its own leader at a council meeting is a step too far. If a majority party has no confidence in its leader, it should be able to change them and the leadership of the council as it can now. The Bill would prevent that. I beg to move.

Baroness Scott of Needham Market: My Lords, Amendment No. 79 raises the same issue as has been raised by my noble friend Lord Greaves; that is, the leader changing the cabinet. Forty-one per cent of councils that operate the leader-and-cabinet model do so as a matter of choice. The noble Baroness, Lady Hanham, said that that model is used in Kensington and Chelsea. However, 59 per cent of authorities that operate that model have decided that the council should choose the member of the executive. The Minister explained when addressing previous amendments how councils which have moved to the leader-and-cabinet model have improved their performance. If they have improved their performance under a system where the council chooses the cabinet, why does she feel the need to force the majority of councils to change the way in which they operate?

There are two potentially unwelcome outcomes. First, in councils in which one group is politically dominant, there is a danger that the loyalty and focus of the Executive will be to the leader as an individual and not to the council as a whole—to their colleagues and their group—because the blunt truth is that they will owe their jobs to the leader and not the council as a whole. That will have a quite a marked effect on the dynamics of the council.

More significantly, I am concerned about the situation in which councils are in no overall control. The noble Lord, Lord Graham, spoke about the will of the people. In many areas the will of the people is that no one party controls a local authority. When a council is in no overall control, it has to be pragmatic about how it finds a way to move the council forward. That may mean all sorts of devices must be used, such as shared leadership or one party being leader for one year and another party taking the leadership for another year. A whole variety of models is in place. The difficulty is, when no one has overall control and two political parties are working together, a leader of one party will appoint members of another party to the Cabinet, which is politically unacceptable. In the councils that I know, that would be, in presentational terms, impossible to justify. However councils have got round it in the past has been a matter for local choice—and this measure will rob them of that.

A similar issue arises on four-year terms, which is the subject of my noble friend’s other amendment. I

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support him very strongly in this because, again, in councils with no overall control it is very unlikely that a minority party in joint administration will put another party leader in place for four years. The result of that may very well be that more councils will be run by minority control, which would be much less stable and would work against the strong leadership that the Minister seeks to achieve.

My Amendment No. 130 deals with new Section 44C and the removal of a leader. The two new subsections make provision for a local authority to remove the executive leader by resolution but do not refer to resignation and what happens should a leader resign.

Finally, my Amendment No. 245 is a tidying-up amendment, removing Schedule 5, which refers to the transitional arrangements for a move to new models. If the other amendments were passed, Schedule 5 would have to go too.

Baroness Hanham: My Lords, I have been in almost total agreement with my noble friends on the Liberal Democrat Benches up to now, so I have not felt compelled to join in with the debate. However, I do not agree with the proposal in Amendment No. 79 that the executive leader should not be able to appoint executives to his or her Cabinet. I hold a diametrically opposed view: if a council wants to elect the executive, that is for it to decide, but there is a lot to be said for the leader being able to appoint people with whom he knows he will be able to work, who have a similar outlook on how things should be done and who will work harmoniously for what is likely to be four years to help the council through. So I am not in favour of that amendment. There are problems with no overall control, as the noble Lord, Lord Greaves, highlighted. However, in this particular aspect there are great advantages when the leader appoints his own Cabinet, which we see at the moment in most or many councils, and I feel that he must be entitled to continue doing so.

Baroness Andrews: My Lords, I am grateful to both noble Baronesses for their comments and to the noble Lord, Lord Greaves, for moving the amendment. We welcome him back. We missed him on Monday. He would have enjoyed the debates we had then, particularly that on a referendum. It is good to see him in his place. I realise that he has made a heroic effort to be here and we hope that he will be well enough to be present throughout our discussions on the Bill.

I fear that in some ways the case I have made has been somewhat parodied. As I tried to explain on the previous amendment, I do not believe for one moment that leadership is the opposite of democracy or that democracy is in any sense a nuisance. After many years of an evolutionary system of local government, we are trying to equip it with a sharper set of tools which will allow it to facilitate people to work together in leadership teams but with leaders who have the autonomy and scope to do what is necessary. We are facing challenges that 10 years ago

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we could not have put a name to. The obvious one is climate change. There is a dramatic need to take tough decisions on where and how we build or how we organise our waste disposal. These decisions do not mean that ordinary members of a council have no view or no value—far from it—but ultimately it now behoves us to organise our arrangements so that we have stronger leadership. That is all that the Bill is leading to, but as I keep saying, it certainly does not diminish the notion of co-operation, debate and discussion throughout the range of activities that a council has to continue to do.

Amendments Nos. 78 and 79 would remove the requirement that the leader must appoint the Cabinet and would instead provide for the full council to appoint all the members of the executive. In the same vein, Amendment No. 83 would ensure that responsibility for executive functions remained with the whole executive rather than being vested solely in the leader. The noble Baroness, Lady Scott, asked why we think that this is an important move. I turn again to the evidence, which applies to some of the other amendments too, particularly Amendment No. 245, which is rather a general amendment. I have referred to the evidence before. It demonstrates that councils operating executive arrangements, which allowed leaders to take decisions themselves and appoint and allocate portfolios to their Cabinet, gained higher CPA scores in the three years between 2003 and 2006. It clearly shows that there was a positive and statistically significant relationship between the proportion of citizens who were satisfied with council performance and the number of executive freedoms, which included selecting members of the Cabinet. That was already the case for the mayoral models. All we are proposing is to place all leaders on the same footing, including indirectly elected executives and the strengthened leader and Cabinet model.

The noble Baroness suggests that somehow loyalty will switch from the council to the leader in that situation. However, the noble Baroness, Lady Hanham, who speaks from great experience—she spoke in Committee and again today—said that it was important for the leader to have confidence in his or her executive team. She spoke about the advantages that the model brings in being able to say to your colleagues, “I would like you to be part and parcel of my team. You have the skills that we need to deal with this particular set of challenges and circumstances”. I heard nothing to suggest that that loyalty to the leader does not mean that there is an equal loyalty to the performance of the council. There is a vested interest in seeing the council succeed. That is why one stands for election. One does not stand in order to fail, either personally or as a member of a council. It seems to me that if we set up these straw dogs or straw animals, we are creating problems which do not exist and we are saying to councils, “You may do this but it comes with an awful lot of problems attached”.

4.30 pm

One thing that the noble Lord, Lord Greaves, said, which I was struck by and will take away and think about, is that councils do not know about some of the

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Bill’s implications for them. I can see noble Lords nodding. That is a serious point, and if the House will allow it, I will go back and discuss how we can address that problem. I do not want to make a meal of this. Those are the reasons why we feel that enabling the leader now to appoint that Cabinet, to strengthen the collective position of the Cabinet in that way, to demonstrate clear leadership and clear accountability, is important.

Amendments Nos. 128 and 129 are on the presumption of a four-year term. I take the point that this is an issue in councils of no overall control. I hope that I can give some reassurance, because it may not have been entirely clear in our previous discussions. We have made a presumption, which is clear in the White Paper, that it is obviously a four-year term for directly elected executives. It is also clear in the White Paper that this is a presumption of a four-year term to enable better leadership. As I said in Committee, it is not simply our view that a four-year term brings stability. It is shared by the Local Government Association which, in its Closer to People and Places report, called for,

It is important that we are talking about a presumption. We recognise that there will be circumstances where it will be appropriate that the term will be shorter than four years. For example, where a council has partial council elections and a member is elected leader who only has two years before their term as councillor ends, then their term as leader will be two years. Equally—this is where it is important to consider the NOC councils—we recognise that it is only democratic for a council to be able to provide in its constitution for whatever arrangements it thinks are locally right for ending a leader’s term of office within the four years. A council may decide and provide for this by specifying a vote of no confidence. However, a council might wish to include in its constitution a range of other circumstances where a council may vote to end the term of the leader, as it does now. I point noble Lords in the direction of several councils that have made specific arrangements in their constitutions for specific circumstances arising, and I will send noble Lords a note on that if they like.

In a situation of no overall control, it could be open to a council to make some expression of that in its constitution when control changes. So let me say again that there will be nothing that imposes a four-year term on indirectly elected leaders. We are talking about a presumption in the constitution. It will be open to a council to provide for the council, if it so votes, to end a leader’s term of office, and the constitution may specify the circumstances in which the vote may be put. That allows for a certain degree of freedom.

The White Paper clearly states in paragraph 3.23:

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New Section 44C provides for the removal of a leader in a new-style leader and Cabinet model. We considered over the summer, in response to the debates that we had in Committee, whether we should make it compulsory for local authorities to have a process for a vote of no confidence in the constitution. However, we shied away from that because we did not want to prescribe on matters of detail. We thought that this was the sort of thing that was best left to local authorities. Local authorities will still be able to include in their constitutions provisions to apply in the case of a vote of no confidence, or a change of political control. Indeed, we know of several councils that have provisions for that circumstance.

I hope that on those grounds noble Lords can take some reassurance from what I have said in relation to the circumstances that they have described of instability and the sort of perverse consequences that might arise.

Amendments Nos. 130 and 131 concern the procedure where a leader is removed during their four-year term. These are matters of detail which will be addressed through regulations dealing with vacancies in the office of executive leader, including those resulting from resignation, under new Section 44H. This mirrors the approach we have taken previously to making provision for mayoral vacancies. We do not believe it is appropriate to put that degree of detail in the Bill and I hope that noble Lords will agree that that is sensible.

I have addressed most of the amendments. Amendment No. 245 would ensure that councils operating the current leader and Cabinet model would not be required to move to the strengthened model. Therefore, it is implicit from what I have been saying that it would be difficult to accept that amendment. I hope I have been able to give noble Lords a degree of assurance on both issues raised by the amendments.

Lord Greaves: My Lords, I understand a great deal of what the noble Baroness said and I understand that in practice things will be worked out pragmatically, as they often are; but if a council does not have a provision in its constitution for removing the leader, and if there is clear will on the council—for whatever reason—that the leader has to be changed, how can it do that?

Baroness Andrews: My Lords, I have to say that I do not know. It seems to me that every council in the country might have to address that in its constitution-making powers. I will have to take advice because I have never come across that situation—or perhaps I have. My note looks like it says, “arrest the constitution”, but I think the position is to “amend the constitution”. That seems sensible.

Lord Greaves: My Lords, I thank everyone who has taken part and the Minister for her response. I would never describe myself as heroic. I shall ponder on that. The answer to my question that I would have given the Minister is the one that she has now given. The council would have to start by amending its constitution to allow itself to change the leader. That is not an easy process nowadays. You cannot just

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table a motion and do it. You must have discussions with the monitoring officer or whatever and go through various processes. My point is to ask why that kind of convoluted, difficult and time-consuming process has to take place. If there is a clear view on the council that the leader needs to be changed, the council should be able to do that as a matter of course. I honestly do not understand why the Minister is resisting this pragmatic amendment.

Some of what I and my noble friend Lady Scott have been saying is a matter of principle. We do not agree with what the Government want to do and the way that they want local government to work. We think that local government will work better and more democratically in a different way—certainly not in the present way or the past way. We must accept that there is a difference of principle across the Chamber. Some of my amendments are an attempt to make the system that the Government want to work in practice. This is a pragmatic attempt to set out in a council’s constitution exactly what happens once a leader loses confidence before the four-year term is up. I ask the Government to continue thinking about this, because they have not got it right.

Equally, what we have put down and what my noble friend said about councils with no overall control is a genuine attempt to allow them to continue to operate well, despite the political situation that they are in. We are not trying to be awkward. I would like to wreck a great deal of what is in the Bill, although I recognise that I am not going to do that, but if it is going to go through, I would like it to work in a practical, sensible and pragmatic way. I hope that the Minister understands that we are moving some of the amendments in that light.

The Minister referred to the CPA scores and to what she believes is evidence that more concentrated leadership gives better leadership. There is a problem with the CPA. From the Government’s point of view, what they would describe as strong, clear, centralised decision-making is a good thing and a good way to run councils. You get higher CPA scores if you run the council in that way, and so I believe that the CPA scores on which the Minister relies are to some extent circular: people find things that they are looking for, they score those highly and then they use that as evidence that that is a good way of running things. I do not know how far that is the case but I am certain that it is the case—at least in practice.

The Minister said that she would take away and consider the fact that councils do not know what is being proposed. I have talked to a lot of councillors, a large number of whom, I admit, but by no means all, are from my party. I think that if they had known about this a few months ago, we would have heard a lot more protest from local government as the Bill went through Parliament. People do not know about the proposal, but we are where we are and we have to work with that.

I should like to have votes on all these matters but I think that I would be wasting everyone’s time if I pressed this to a vote, so I shall beg leave to withdraw the amendment. However, in doing so, I want to say

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that I do not think these issues will go away. Many people in local government will not like what they are being told to do. In councils with no overall control, the normal processes of politics will take over. There will be a lot of negotiation and discussion, and sensible councillors will end up running their councils in the way that they think is best within the framework of the legislation. I think that it was Phil Woolas in the Commons who said that many councils will not change because they will find ways round the legislation, but that is not the way that things should be done. The problem is that, as my noble friend said, those processes of negotiation take place behind closed doors. Nowadays, the rooms are no longer smoke-filled but there are still lots of non-smoke-filled rooms where all this negotiation takes place. We are trying to bring the process into the open and have it done openly at council meetings, but that is not the way that things happen nowadays.

Therefore, with a sense of sadness but with a belief that local government will nevertheless struggle on, despite what is being imposed on them, and probably do it fairly well, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 79 not moved.]

Baroness Scott of Needham Market moved Amendment No. 79A:

The noble Baroness said: My Lords, with Amendment No. 79A and the long list of amendments grouped with it, we return to the question of directly elected executives. When I first read the proposal in the Bill, I thought that it was a pretty daft idea. As time has gone on and we have had more debate in this place, the flaws in the model have—to me and, I think, to a number of colleagues—become even more apparent.

Like my noble friend Lord Greaves, I have spent quite a lot of time this summer meeting council groups, which I do all the time, and I have talked to them about the Bill. I can confirm, as my noble friend said, that they have no idea what is down the road. Partly because they have been exercised by the restructuring part of the Bill and by whether they will be involved with that, they have rather taken their eye off the ball in terms of structures.

I do not believe that the Local Government Association has helped, because it has had nothing to say publicly about these matters. I would not expect it to take sides; nevertheless, publicising the fact that the Bill is on its way would have been part of its core job and it would have been very helpful to local authorities. I have found a remarkable degree of ignorance about what is proposed here. I can tell the noble Baroness that, when I talk to members of local authorities about the directly elected executive proposal, their jaws begin to drop as they wonder how on earth that will work.

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