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As I said, the two noble Lords spoke forcefully about the role of the districts. I shall not seek to repeat at any length their description of the diversity of districts within quite close areas, the districts often being the authorities with which the public identify. Therefore, it seems to us that a district should be able, if it wishes, to take advantage of the benefits that we are told this clause will bring. Some economic policies and plans will be very local, and I stress the voluntary nature of my amendment, giving districts the option to buy into the arrangements.

The Government’s response at the previous stage and the provision smack of an agenda for bigger unitary authorities. As we have said before, there may be things to commend a unitary system across the country but we should debate that on an open and clear basis. We on these Benches find this quite difficult, coming at it all somewhat crabwise.

Amendment 151 is consequential on the first amendment. We have tabled Amendments 152 and 153 because Clause 65(6)(b) seems to us very narrow. It states that the county must have regard to the material produced under Section 13 of the 2004 Act. As we have lost so much of our debating time this afternoon, I shall not find the flag and read Section 13. The reference to the Planning and Compulsory Purchase Act 2004 reminds us of the importance of the link between economic generation and planning for an area. Of course, the district is still responsible for much planning by way of the local development framework and development control. The Bill provides

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for other considerations prescribed or directed by the Secretary of State, and there may be other very relevant material. That is why our Amendment 153 inserts the words “or otherwise”.

Rather than co-operation going only one way, with the district co-operating with the county, I propose in Amendment 154 that both district and county should co-operate with each other. Amendment 155 would allow for an assessment made before the commencement of the section to fulfil the duty that the section will impose. The world did not start this year and will not start when the Bill is enacted and the relevant clause comes into force. It seems very unnecessary for local authorities to have to repeat what they have already done when they can simply point to work which many of them are doing at the moment in assessing the economic condition of their own areas. In our view, having carried out the work, the duty should have been fulfilled.

5.45 pm

Lord Patel of Bradford: My Lords, this group of amendments concerns the proposed local authority economic assessment duty. I shall address Amendments 145 and 146 first. The Minister has put her name to the amendments, as the noble Baroness, Lady Warsi, said.

We have listened carefully to noble Lords’ concerns that a Secretary of State power to direct an individual local authority to revise its assessment would give the Secretary of State undue control over how the assessments are taken forward. The power of direction was only ever intended as a safeguard and, as we are confident that local authorities will wish to keep their assessments up to date, we are very keen to keep government prescription to a minimum. For that reason, we are happy to support these amendments.

Amendment 147, tabled by the noble Baroness, Lady Hamwee, and the noble Lord, Lord Tope, would allow a non-unitary district council to elect to be placed under the duty, so that in two-tier areas both the county council and district council would be under a duty to prepare an assessment for their respective areas. Amendment 151 is a consequential amendment.

I understand the fear expressed by noble Lords that district councils would have a peripheral role in the preparation of local economic assessments in two-tier areas and that countywide assessments would fail to take account of the important contribution that district councils make to wider economic development. I assure noble Lords that we do not underestimate the vital role that districts play in supporting local economic development and regeneration. Indeed, we fully intend county councils and district councils to work in partnership in preparing their economic assessments.

The Bill, in Clause 65(6), already requires the county and district councils to work in partnership in the preparation of the countywide economic assessment. It includes a requirement on the county council to consult and seek the participation of district councils within its area and to take account of the evidence gathered by the district council in the course of its role as planning authority that may affect the development of the area. It also includes a requirement on the

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district council to co-operate with the county. We do not believe that the amendment would further strengthen partnership working between the county and districts.

The amendment would place a separate duty on the county council and the district to prepare an assessment. As noble Lords are aware, local authorities have general powers to discharge their functions jointly. Thus, the county council and district councils electing to be bound by this duty could decide to prepare a joint county assessment. Although, in the best case, districts and counties might choose to exercise their duties jointly, nothing in the amended provisions would require them to do so. Therefore, we cannot discount the possibility that a district council would want to produce its own assessment rather than work with the county. In such a scenario, the district’s assessment would have the same statutory status as the countywide assessment, which could lead to unnecessary duplication of effort. It could also mean that regional partners would be presented with two potentially conflicting assessments for the same area in preparing the regional strategy. Furthermore, if a district council was to go it alone, Amendment 151 would result in there being no requirement for the county to consult it and seek its participation in preparing the countywide assessment.

As I explained in Committee, we believe that it is important that assessments should reflect the local economic geography as much as possible. We do not dispute that district councils have a key role to play in economic development and regeneration. However, economic linkages or economies do not stop at district council boundaries; the solutions to local economic problems can often lie in the wider economy. For example, skills shortages and shortcomings in connectivity often require a county or sub-regional response. Counties provide a better match for real economic markets and are better placed to build a broad strategic understanding of the drivers of the wider economic area. For these reasons, we believe that it is better to prepare the assessment at a county level.

Therefore, we believe that the best way to take forward local economic assessments is to place the duty on county councils but with a clear requirement for the county to work with the districts. Counties are particularly well placed to lead on economic assessments, as they have a strategic overview of the economic, social and environmental well-being of the county as a whole. They are already the responsible authority for preparing the local area agreement in two-tier areas and they tend to be better resourced for this type of work than district councils. We consider that the Bill, as drafted, requires both the county and district councils to work in partnership in preparing the local economic assessments and that it provides district councils with a specific role in recognition of their important contribution to the assessment. Such an approach is simple and transparent, provides clear lines of accountability and will, it is hoped, lead to high-quality, consistent assessments. We believe that it strikes the right balance between ensuring that district councils are fully involved and the need to have clear lines of accountability. I hope that I have addressed the noble Baroness’s concerns and that she will understand why I think that the amendment is not necessary.

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Amendments 152 and 153, also tabled by the noble Baroness, Lady Hamwee, and the noble Lord, Lord Tope, would require a county council to have regard to any material produced by a district council, regardless of whether it relates to the district’s planning functions. Amendment 154 would require the county council and district council to co-operate with each other. The Bill makes specific mention of material held by the district council in the discharge of the district council’s functions under Section 13 of the Planning and Compulsory Purchase Act 2004, because the local economic assessment is expected to inform the preparation of local development frameworks. In view of this, it is important that there is consistency between the evidence assembled at a district council level in preparation of the local development framework and the evidence gathered for the local economic assessment duty. We should also not lose sight of the fact that the material collated under Section 13 is wide-ranging and is not restricted to economic data, as I think the noble Baroness mentioned. Section 13 requires local planning authorities to keep under review any matters that may affect the development of their area. This would include, among other things, principal physical, economic, social and environmental characteristics of the area.

Many district council functions relate to economic development and regeneration. Both district councils and counties contribute in different ways in supporting economic development, often working in partnership. For instance, both tiers work together alongside other partners in tackling skills challenges. There is a range of evidence that local authorities can draw from in developing local economic assessments, some of which is held by districts, some by counties and some elsewhere. Local authorities should also, where appropriate, draw on the evidence assembled in developing other key strategies such as local housing strategies, which are assembled by districts, and local transport plans, which are assembled by counties, in putting together their economic assessments. It is important, therefore, that county and districts work together with other partners in agreeing the range of evidence needed to assemble the local economic assessment, aggregating it and disaggregating it where necessary so that it both informs local priorities and gives a broad strategic picture that can properly inform the regional strategy. Our intention is to address these issues clearly in future guidance. We do not, therefore, believe that there should be an open-ended requirement on the county council to have regard to any material that the district council decides to provide. However, there needs to be a genuine dialogue between the county and districts. We believe that the Bill as drafted will help to achieve that.

Amendment 154 would place a requirement on both the county council and district council to co-operate with each other in the preparation of a local economic assessment. We do not believe that this amendment is necessary because, as I have explained, the Bill already includes a requirement on the county council to consult and seek the participation of district councils and the district councils to co-operate with the county councils. It is implicit within such a requirement that the county council should work closely and co-operate with district councils within its area. I can assure noble Lords that we will emphasise the need for co-operation in guidance.

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Amendment 155, tabled by the noble Baroness, Lady Hamwee, would provide for an assessment prepared prior to these provisions coming into force to be able to fulfil a local authority’s statutory duties in relation to Part 4 of the Bill. Noble Lords are understandably keen to ensure that existing work done by local authorities in developing an economic evidence base is not lost. We completely agree that local authorities should, wherever possible, build on existing work in preparing their new assessment. The important point is that the assessments be fit for purpose and give an accurate and up-to-date assessment of local economic conditions. As the policy statement on local economic assessments, which was placed on the Communities and Local Government website in January, makes clear, a local authority that has already carried out an assessment will need to consider it in the context of the new duty and any government guidance. While such local authorities may need to make some changes and will certainly need to ensure that they meet their new statutory obligation to consult, we do not intend that the work that they have already done should go to waste. I hope that noble Lords will, therefore, understand why we believe that these amendments are not necessary.

Amendment 145 agreed.

Amendment 146

Moved by Lord Patel of Bradford

146: Clause 65, page 48, line 3, leave out subsection (3)

Amendment 146 agreed.

Amendment 147 not moved.

Amendment 148

Moved by Baroness Warsi

148: Clause 65, page 48, line 13, leave out paragraph (a)

Baroness Warsi: My Lords, in moving the amendment I shall speak also to Amendments 149 and 157. I return to the simple point: we agree with the principle of conducting assessments. We agree that when a local authority is conducting an economic assessment of its area it is right that relevant bodies and persons should be consulted. Where we disagree is on the need to spell out in such great detail which those partner bodies must be. This has been a recurring theme throughout the Bill. The Government have gone into prescriptive overdrive and at every stage we have suggested a more flexible approach. This is another such situation. Our amendments would leave in the duty to consult but leave it up to the local authority to choose who the consultees will be.

One of the concerns that I have with putting lists into the Bill is that it may encourage a tick-box mentality, whereby a local authority may simply go through the list in the Bill but may not go any further. By placing the onus on local authorities, we will encourage them to consider every possible body that they should consult. We would therefore free up local authorities and allow

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them to think creatively when consulting, rather than adopting a mechanical approach and thinking, “We’ve have done our bit”. The list of partner authorities in Clause 66 is no doubt exhaustive and complete, or so the Government suggest, but that list may change. The Secretary of State may have to keep laying down orders to update the list to keep it exhaustive and complete. I suggest to the Minister that this Bill could be improved with the removal of Clause 66. I beg to move.

Lord Patel of Bradford: My Lords, the noble Baroness, Lady Warsi, and the noble Lord, Lord Hanningfield, have tabled Amendment 148, which would remove the requirement for local authorities to consult named partner authorities in preparing their local economic assessment. Amendment 149 is a consequential amendment, while Amendment 157 would remove Clause 66, which lists those partner authorities.

We discussed these provisions at some length in Committee. We explained that we have included these provisions in the Bill because we believe that there are partners that local authorities should be required to consult in carrying out their assessments. The authorities that are listed are already working closely with local authorities in local strategic partnerships. We believe that it is important that these partners should be given the opportunity to engage with the principal local authorities in assessing the economic conditions of the area. The list of partner authorities takes as its starting point the list of partner authorities which is set out in Part 5 of the Local Government and Public Involvement in Health Act 2007 for the purpose of agreeing local area agreements and which responsible authorities must consult when developing their sustainable community strategies.

We have taken this approach because local economic assessments are expected to form part of the evidence base for the sustainable community strategy and for the local area agreement negotiations. All the partners listed have a duty to co-operate with local authorities in determining local area agreement targets and must have regard to these targets in the exercise of their functions. In view of this, we believe that it is only fair that these partner authorities should have an opportunity to contribute to the local economic assessment. Involving these partners at an early stage in identifying the economic strengths and weaknesses of the local economy will help to strengthen the impact and effectiveness of targets agreed through local area agreements further down the line. Also, we should not lose sight of the fact that local economic assessments will inform the preparation of the regional strategy. It is important that the regional strategy should be informed by the best possible advice and knowledge. Many of the partner authorities listed in Clause 66 will play an important part in that process as well.

However, as I explained, our intention has been to ensure that local authorities at the very least consult those public bodies that are working closely with local authorities in determining local area agreement targets and delivering them. We are keen to keep prescription to a minimum and to allow space for local flexibility. In Committee, we heard the arguments put forward by the noble Baroness and the noble Lord against the

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inclusion of partner authorities. I undertake to table appropriate amendments at Third Reading to deal with those concerns. With that reassurance, I am sure that the noble Baroness will be happy to withdraw the amendment.

Baroness Warsi: My Lords, I am delighted to hear what the Minister has said. It has taken me a little by surprise. At this stage, I beg leave to withdraw the amendment.

Amendment 148 withdrawn.

Amendment 149 not moved.

6 pm

Amendment 150

Moved by Earl Attlee

150: Clause 65, page 48, line 14, at end insert—

“( ) When conducting an assessment under this Part, a principal local authority must consider the impact on the economic well-being of the authority’s area, including where applicable the effect on ports, caused by non-domestic rating revaluations.”

Earl Attlee: My Lords, on behalf of my noble friend Lord Bates, I beg to move the amendment standing in his name. Your Lordships debated this matter last week. It concerns retrospective non-domestic rating of ports. We had an excellent debate. I expressed my extreme concerns regarding the current situation. The noble Baroness, Lady Andrews, gave a very careful and detailed explanation of the problem and why the Government believe that nothing more can be done to improve the situation. The House then divided and voted to accept my Motion to regret that the regulations would not prevent several port companies from becoming insolvent. The underlying SI was approved as it actually improves the situation, but in my view not enough.

Today, the Minister in another place, John Healey, made a Written Statement to the effect that the Government will ignore your Lordships’ determination and leave the way open for councils to issue rate demands forthwith. Your Lordships will recall that local authorities are bound to collect the rates due diligently. My question for the Minister is: what happens next? Exactly when will local authorities issue rate demands and when will the amounts first due have to be paid? I beg to move.

Baroness Hamwee: My Lords, I was unable to be in the House on Wednesday when the noble Earl moved his Motion, but I read the debate with interest. Clearly, this Bill cannot stop the orders; that is not within the scope of the Bill. However, there is something, which I take from the debate, which the Government could do. I was glad to see that the Minister's response answered the point about trading while insolvent. Given that the rates due in the future are a future liability, she talked about,

She said that they are not in such an extreme position as seems to have been suggested in some quarters. I was glad she said that because it confirmed what I had understood to be the case although my professional experience of this is by no means recent.

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The Government can impress on banks and on lenders that that is the position. The concern expressed was the difficulty in which individual companies are being left because lenders are taking the view that they are either insolvent or in such a precarious position that one must not lend to them. In saying that, I am not in any way trying to diminish the seriousness of the position and the problems faced by some companies. We own a large part of the banks so we should always use opportunities to persuade them to act in a civilised manner. That is a specific point which the Government could take up.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Andrews): My Lords, the noble Earl, Lord Attlee, was absolutely right: we had a very good debate last Wednesday and we put many things on the record. I am happy to reiterate our concern today, without going into any detail, about the predicament of some businesses faced with unexpectedly large backdated bills. I went into some detail about the history of that and why it was such an unfortunate occurrence, coinciding with the downturn and so on.

I recognise the anxiety in the House and I recognise that the non-fatal Motion was lost by the Government. I put the same Statement into Hansard today, recognising and respecting the response of the House but reiterating, as I said in the debate, that we had gone as far as we could within the limits of the law because we could not waive tax liability—no Minister could. I am grateful to the noble Earl for not rehearsing that today. Facts concerning tax liabilities that are now known cannot simply be disregarded, as he will understand, and of course port occupiers are not alone in having backdated liabilities as a result of ensuring that the ratings list is accurate and up-to-date.

We know that some businesses may struggle with significant and unexpected bills for more than 33 months from 1 April 2005 and that is why we have come forward with the new regulations which give businesses more time to pay those liabilities in certain circumstances. Under those regulations, businesses facing such bills will not be required to pay their backdated liability within the current financial year. Instead, the new legislation will give qualifying businesses the facility to pay their back-dated liability for previous years in equal interest-free instalments over eight years. As I told the House last week, that is absolutely unprecedented and it has been welcomed. We think it will help about 1,500 properties a year across England, within and outside ports, and will give help with cash flow problems faced by some companies.

On the specific question posed by the noble Earl, my advice is that bills can be sent out any time now. Local authorities will have to issue demands and bills now because there is no reason not to bill and payment of bills is due 14 days from the issue of the due bill. The schedule of payments, as agreed with the local authorities, would be eight equal instalments, if a company falls into that situation. That is what will happen.

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