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Noble Lords will note in Clause 104, which has been accepted on all sides of the House, the remarkable number of partner authorities. There is a huge range, and rightly so. We want the principal local authorities—the main partners—to be able to work closely with a great many other deliverers of local services. I know that there is general acceptance across the parties, at local and national levels, that this opportunity must not be missed. In the words of the chairman of the Local Government Association, we should all be,

Surely the Government must have that in mind.

It is already envisaged that there should be strong local partnerships with the police and with health delivery agents. I have always thought it extraordinary that although the public rate the National Health Service and the prevention of crime as the most important local considerations, those are the services which are not subject in any way to local accountability. I used to be a member of a police authority because I was an elected councillor; these days, police authority members are appointed by the Home Secretary. If you want to complain about the National Health Service you will have to go to the Secretary of State, the only democratically elected accountable person. So this is a small step towards greater accountability at a local level and I am sure that we all welcome it. It is also true that the Bill and the Government’s proposals provide for a transfer of accountability for education of 16 to 18 year-olds from the learning and skills councils to top-tier councils. That, too, is a very healthy step.

However, what about transport planning and economic development? It is extremely important that we should see those issues in this context as well. In an interesting Statement, the Minister for Communities and Local Government, Mr John Healey, said:

He continued:

My colleague in the other place—indeed, my successor as Member of Parliament for North Cornwall—said to the Minister:

The Minister, Mr John Healey, responded:

My noble friends and I wish to hear a clear statement today in the light of the fact that these changes in the relationship between local and central government are happening outwith this Bill and the recognition that this legislation relates to those changes.

Another important development in recent weeks is that the Treasury—which has never before been seen as particularly keen on devolution—has taken the lead in publishing so-called proposals for a sub-national review. Where in the country can one see a distinct, historic and geographical identity? Areas such as Cornwall and Northumberland are clearly sub-regions in that sense. Unlike the Conservative economic regions, which are so anomalous in relation to these problems and so diverse internally that they do not make much sense in this regard, they are not artificial creations.

Subsidiarity, an ugly word but an important concept, is now accepted on all sides of your Lordships’ House as an extremely important part of this legislation and the Government’s other proposals. Perhaps we should define subsidiarity and—in the context of taking decisions as close as possible to those whom they affect—get a government statement on precisely how the LAAs will be initiated. They should not come down from Whitehall but should come up from the partners on the ground.

I hope that the new local area agreements will be used as the excellent test beds they could be for more local decision-making in the future. Why not ask them to undertake pilot projects in important directions? Why not try out a local income tax to replace the failed Conservative council tax model? A bit more pilot experimentation in this field might save the Government a great deal of trouble.

At the centre of the issue, the amendment and this part of the Bill is our belief that the Government’s talk of empowering local communities and individual citizens, excellent though it sounds, must mean empowering elected councils and councillors. In the very interesting The Governance of Britain, the first Green Paper produced by the new Prime Minister in the summer, the executive summary said:

Paragraph 179 said:

Concordats are not always a terribly successful method of getting agreement. Sometimes they are challenged, even by Members of this House. But at

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this stage, we have no idea what that concordat will mean. What is its relevance in this context? If the Bill does not even give local elected representatives the prime initiative—the prime lead role—in developing appropriate local area agreements for their area, that spells disaster for any attempt to make the proposed concordat an evenly balanced agreement with subsidiarity at its heart.

I hope that everybody in your Lordships' House now agrees that the man—or, indeed, the woman—in Whitehall does not always know best. I hope that the Minister will not take that as a personal challenge but will reassure us that the Government understand the importance of the issue. I beg to move.

Baroness Andrews: My Lords, this is a refreshing return to some of the fundamental principles in the Bill. I could not agree more with the noble Lord in that I do not for a moment believe that Whitehall knows best. The thrust, burden and tone of the Bill and of the debate at each stage of our proceedings has been to reinforce and verify the fact that Whitehall does not know best but is in a more balanced partnership with local government which can reflect the real needs of the local community. That is reflected, in some ways, in local area agreements against the background of the country as a whole and its needs.

The noble Lord was quite right that the Bill is about empowering local communities and local councillors. Various provisions celebrate the role of local councillors and strengthen their visibility. I shall talk about the community call for action in a moment. The Government started this process with the White Paper; and the Roberts commission will now take us there in terms of the quality and scope of the people we want to see in local government and the tasks they have to undertake. Two arguments flow from that: the noble Lord deployed the wider argument in relation to the new unitaries but also about the making of place. So much has been said about place-making in recent months, led by Michael Lyons, who introduced the term. I believe it is powerful and effective to talk about making places; the partnerships which are reflected in the Bill and the local area agreements are about people coming together to say what they want about the place they live in and agreeing on how they deliver that through local government, now working in much more explicit and determined partnerships.

Beyond place-making in the local area, the noble Lord talked about other things that we have addressed in the Bill. How do we work beyond a local area so that the sub-region and all its natural contours can also be reflected in the devolution of power in the making of, for example, multi-area agreements, which will grow from the local area agreements? My honourable friend in another place talked about the disposition of power to make something of the sub-region—transport, of course, has a particular relevance, but there are other factors outside local areas as well.

5.45 pm

I agree with the noble Lord; he is right to raise those points. He is also right to remind me of the power of the term “flexibility” and its incidence in our

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discussions. There is nothing more flexible than the local area agreement. It represents degrees of flexibility between partners and between local partners and local government through regional offices in the design of the future. He referred to dynamism and the responsiveness to local need and local vision. That is absolutely right. Considering the partnerships, the nature of places, the diversity and strengths as well as the real needs and challenges gives us an understanding of what the local area agreement is really about.

That takes me to the question in the amendment about the nature of the debate on local area agreements. Who makes the local area agreement and on what terms? This will come up in the next amendment. The essential point about the local area agreement, as we have discussed at every stage, is that it is locally driven. Its most distinctive feature is a negotiation between local partnerships and central government. It will be the only place that central government and local government will meet in the future to discuss the relationship between the overarching needs of the country as a whole, the economic, social and environmental pressures that we face, and the local area.

The idea that there is a built-in conflict or opposition between national and local objectives is contrary to common sense and to practice. That practice has already been tested in the 17 local partnerships which are developing. Whether the needs of the nation include better healthcare or greater success in schools, they will be settled at the local level to reflect the real challenges that that local community faces. I believe that the Bill strikes the right balance between local authorities and partners. We cannot take central government out of the picture; it is where local government and national government now meet to discuss national priorities and how they will be reflected in local action.

We have stripped down the number of indicators from 1,200 to 200 and the performance regime has been lightened. Essentially, an agreement should be genuinely driven by what local people want and say they need, working in partnership to deliver it.

Sheffield wants to tackle health inequalities by setting a target to increase life expectancy. It is doing well against the national average; therefore, it may not be necessary to designate this and make it a national target. But Sheffield wants to continue improving health equalities, so it could decide in the course of negotiations to include a more stretching or demanding local target. National government concerned about obesity or care of the elderly—whatever the 200 top indicators will be—will ask local authorities what really matters in the area and what they need to monitor and designate in terms of national ambitions. They will ask the local area to tell them what it thinks is most important so that they can work it out together. That has been happening all over the country over the past three to six months, as people have begun to work through these processes. It is innovative and challenging, but as a result we will get something that the local community can believe in and deliver, recognising that these things matter to all of us nationally.

Amendment No. 39 would allow a draft local area agreement to be initiated either at the direction of the Secretary of State or at the direction of the Secretary

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of State if requested by the responsible authority. Clause 106, on the other hand, allows only for a local area agreement to be initiated by the Secretary of State. That is more a technical provision than anything else. It is obviously critical that there is a clear and agreed process and timetable by which LAAs will be negotiated and signed off, and introducing two possible routes for initiating an LAA—one at the discretion of the local authority— would cause genuine confusion in the process.

Clause 106 sets out that this process will formally be at the direction of the Secretary of State but we will elaborate on this in guidance. That guidance, significantly, is being developed collaboratively—for example, with the Local Government Association—and will set out the process and the timetable. That is significant because the partnership with LGA runs through the Bill and the noble Lord, who has spoken passionately about Cornwall, knows that local authorities are keen to do this. They see the local area agreement—and, in time, they will come to see the multi-area agreement—as offering huge possibilities of new ways of working and a much better chance of success, whether that is in reducing the rates of teenage pregnancy or in reducing the stubborn pockets of worklessness that we still have in some affluent areas.

With that in mind, I hope the noble Lord is confident that the debate has addressed the issues that he raised and that he will feel able to withdraw his amendment.

Lord Tyler: My Lords, I am grateful for the Minister’s comments; she has entirely fulfilled my expectation. She has made as mollifying and positive contribution as she has on previous parts of the Bill. However, I worry when I hear that there is a technical reason for what otherwise seems to be a simple statement of the obvious. She says that local authorities will be very much involved in the preparation of LAAs—I understand that—but we wanted to have that in the Bill. She has used all the right phrases to try to make me feel better about this and I appreciate that.

The Minister has spoken of the way in which the partnerships may operate; I accept that. She accepts that sub-regions may well be the right units for looking at transport and economic planning issues; I agree with that. Indeed, I am worried when Ministers say that they absolutely agree with me—it makes me think that perhaps I have made a mistake—but on this occasion I understand precisely why she is saying that. My worry is that it is one thing to say—and this will be on the official record—that this a locally driven agreement, but when we seek to put that in the Bill it appears not to be possible to do so. She said that it is not possible to take central government out of the picture, but that is not what we were intending to do. We simply wanted to make sure that the responsible authority as defined in the Bill should be able to seek an LAA definition.

There is still a flavour of a top-down bureaucratic approach here. I take everything the Minister says and I understand it, but I am sure my noble friends and other Members of your Lordships’ House will want to make sure that when the guidance comes forward it

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is not just putting on paper a firm conviction that the man or woman in Whitehall knows best. However, I appreciate the care the noble Baroness has taken and the assurances she has given us and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 108 [Duty to have regard to local improvement targets]:

Baroness Hanham moved Amendment No. 40:

The noble Baroness said: My Lords, I can be reasonably brief. These are Report stage amendments which were withdrawn by agreement because they were confused with others.

The amendments seek to ensure that the Secretary of State does not meddle with any targets once they have been agreed by local authorities. We have bandied around the numbers of targets set by central government. We were hoping that there would be no more than 35; the Minister will not put them in the Bill but we are all assuming that the number will be limited. Once the Secretary of State has set his or her target, these amendments would prevent the Secretary of State arbitrarily changing any other targets within agreements. He will be able to make changes only to national targets, leaving local targets alone. Local authorities have a plethora of targets imposed from central government. Therefore, once central government have resisted the temptation to produce any more, any changes should be limited only to those targets set by the Secretary of State, leaving the local authorities to deal with their own targets. That is basically the amendment. I beg to move.

Baroness Andrews: My Lords, I feel that I have answered most of these amendments previously and I try not to repeat myself. I appreciate the spirit in which the noble Baroness has moved the amendments and the seriousness with which we have debated over the past three stages the relationship between local and central government, but the amendments would have the effect of destroying that partnership by removing the key partner. We would be left with a situation in which local authorities would be dictating to central government what central government’s priorities were, which would be unbalanced and unrealistic.

The most interesting feature of an LAA is the requirement for discussion-based negotiations between local partnerships and central government. We believe the right balance has been struck and that we cannot take the responsibility away from central government; it will be the only way in which central government can signal priorities and involve individual localities. It sits alongside the significant decision to strip down the national indicators from 1,200 to 200, which has been much welcomed by local government. Along with that, the performance regime has been lightened to meet the real risks and challenges and it now has far greater freedom to determine how to meet local needs.

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The problem with the noble Baroness’s amendments is that they would pre-judge the negotiations that have already begun and will go on over the next six months. We have already made clear in the operational guidance that we published on 18 September that these new-style LAAs will have to have robust and open negotiation at their hearts. The effect of the amendments would be to try to distinguish prior to the approval of targets the ones which are of local interest and those which are of national interest. We presume a conflict of interest, which I addressed previously, because I do not see why that should be seen to be the case; it is a false distinction. The effect of the amendments will be that from within the draft LAA local partners will need to specify which targets are of national interest.

There is a presumption that the Secretary of State is a tyrannical figure dictating to localities rather than negotiating with them. That is not the case. We are talking here about the role of the regional officers, a collection of delightful and efficient people who are well known in the locality and know the area well. There will be priorities that they will want to tackle and there will be total agreement on the fact that they are both locally and centrally important. As I said, the priorities may be reducing worklessness or may be improving school standards; they will be different in different areas. It will depend on the circumstances of each case whether or not they are designated as national targets. Essentially, those will be the only targets which are reported on because the local targets, the non-designated targets, will not have to be reported on. If we removed the Secretary of State from the process, we would have a purely local agreement. Within that, local authorities would not find themselves totally free of central government’s priorities, health and welfare; what they would find was that central government departments would employ their own individual targets for each authority along with separate performance management, so we would be back to a situation in which there were far more targets and far more—I would not say anarchy—but individual negotiation. We are trying to get away from that sort of situation. In the kindest spirit I suggest that what noble Lords propose is not only unrealistic but actually means that we would have to turn away from those genuine improvements that we have made to reduce the role of local government and which we see now in the LAAs, which introduce a new and better way of doing things and have been welcomed.

I hope that the noble Baroness will accept those arguments. She has been valiant in her championing of local targets and local authorities, as I always suspect she will be, but I hope that she can now withdraw her amendment.

6 pm

Baroness Hanham: My Lords, I thank the Minister for her reply. We may see government officers in a slightly different light, and I am not entirely sure that across local government the Minister’s bright view will be accepted. However, as she says we have had quite a lot of debate on this matter. It is now going to be a question of sucking it and seeing whether the

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provision is going to work in the right way. I hope that all the words that the Minister has spoken today and on other occasions to the effect that the Secretary of State will have a light-touch regime will be borne out—and borne out by all those regional officers. That is where the negotiations will take place, so the Secretary of State’s view must be passed down to them. I am sure that it will be, but we shall wait and see. I have taken this as far as I can go and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 110 [Revision and addition of targets]:

[Amendments Nos. 41 and 42 not moved.]

Clause 111 [Designated targets: revision proposals]:

[Amendments Nos. 43 to 48 not moved.]

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