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There will be a shared commitment to lead the changes in behaviour and practice from central government departments, agencies and offices as well as councils and local partners which will be required by local area agreements. Emphasis will be given to the objective of giving councils greater flexibility in their funding to facilitate the autonomy referred to in the European Charter of Local Self-Government. There is also a reference in the concordat to a commitment to co-operation on a new relationship between businesses

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and councils and to increasing local democratic accountability of key public services and, in particular, police and health services.

It is not entirely clear what has actually happened since the signing of the concordat in December 2007. It certainly does not appear to have made a big impact on local councillors, let alone the electorate. A survey of just under 500 councillors in English authorities between 28 August and 5 September last year showed that just 56 per cent had heard about the concordat; 35 per cent had not heard about it; and, curiously, as many as 9 per cent of local councillors surveyed did not know whether they had heard about it. Of the 56 per cent who had heard about the concordat, 71 per cent said that they did not know very much about it, and only 2 per cent said they knew a great deal about it. Some 76 per cent agreed that it was right for central and local government to agree common priorities, objectives and partnership arrangements, with 57 per cent agreeing that the negotiation of a central-local agreement must be made a formal statutory requirement, and just 27 per cent disagreeing. The purpose of this amendment is to put the arrangements on a statutory footing.

A key reason for this approach is that the concordat does not appear to be working as it was intended. It is not clear what progress has actually been made towards progressing the package of intentions and future commitments in the concordat to which I have referred. It is not clear if any meetings have been convened since December 2007 between Government and the LGA with this objective. In response to a Written Parliamentary Question in the other place on the operation of the concordat, the Minister said that,

However, as I have already set out, the intentions of the concordat cover rather more than local area agreements, and on the other aspects there was the written equivalent of silence in the Parliamentary Answer.

Indeed, on the same day there was an Answer to a further Written Parliamentary Question in the other place asking on what dates the central-local partnerships had met since December 2007, what arrangements had been made for regular meetings and what arrangements had been made for monitoring the operation of the central-local concordat. The reply referred to a number of meetings between government Ministers and LGA group leaders on different topics over the past year under the umbrella of the central-local partnership. However, it went on to say:

“We are currently considering the future role and terms of reference of the Central-Local Partnership. One of the roles of a renewed Central-Local Partnership is to monitor the operation of the Central-Local Concordat, and to revise it for the future as necessary”.—[Official Report, Commons, 21/7/08; col. 762W.]

That is not exactly an answer that would lead one to believe that the signing of the concordat had led to the implementation of any significant changes or developments at all. Yet, in the survey that I just referred to, 87 per cent of the councillors who had heard of the concordat felt that the central-local

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partnership should bring all relevant government departments to the table with the Local Government Association on a regular basis, with only 6 per cent disagreeing; and 74 per cent felt that the implementation of the concordat should be monitored independently, for example by a parliamentary committee, with just 12 per cent disagreeing. My amendment also addresses the issue of monitoring by providing for the Secretary of State to make an annual report to Parliament on the operation of the central-local partnership.

A broad statutory arrangement to meet, consult and establish agreement would ensure clarity and continuity as the basis of a sustainable partnership between central and local government. The concordat, which was a government proposal in their Green Paper, should be a practical and dynamic expression of the relationship between the spheres of central and local government. In reality, the concordat has an essentially informal status. One of the results of that is the lack of impact it has had on local councillors.

My amendment does not enshrine the concordat itself in legislation as its format is liable to change and there is a need for flexibility. Indeed, my amendment allows for procedures to enable flexible working. Under my amendment there is provision for an annual meeting, and the central-local partners would agree the principles under which they operate. There is a case for enacting a statement of principles to ensure that local government is given the weight necessary for recognition of its constitutional position, commanding the attention of the courts, the Government, the Civil Service and local authorities.

The reasons for embodying the concordat process—it is talking about the concordat process in legislation—is to ensure that it is a transparent process open to parliamentary, local government and public scrutiny, that it has an effective agenda, and that it meets. This is not legislation for the sake of legislation. The survey to which I referred showed that there is broad support for central and local government representatives to get around the table. If that is going to make a difference, central-local partnership meetings need to happen with a degree of regularity and those involved need to be called to account for the progress they are making.

At present, the very informality of the concordat reduces the likelihood that the agreed set of principles will be tackled. Since I first tabled the amendment—which was originally intended for Committee stage, which seems an eternity ago—there has been a meeting of the central-local partnership, in February 2009. I do not know whether it is a coincidence or whether my amendment has led to questions being asked about what has happened to the concordat. Suggestions have been made to me that this may have been the only meeting to have been recognised as a formal central-local partnership meeting to have taken place under the December 2007 agreement. I understand that the meeting was to discuss matters of considerable urgency related to the current economic situation and that it was not a meeting to look at some of the more fundamental long-term issues covered by the concordat.

I was told yesterday that a series of meetings have been arranged between the LGA and individual Ministers which started last month and will run through to next

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month, with most being listed as introductory. That would seem to add weight to the view that not a lot has happened since December 2007. The parties to the concordat—the Local Government Association and the Secretary of State for Communities and Local Government—agreed in the last paragraph of the concordat that they would come together regularly in a renewed central-local partnership, which would also be responsible for monitoring the operation of the agreement and revising it as necessary. I question whether that has been done, although I have no doubt that my noble friend will address that particular point when he responds. If the concordat is to have an impact, it should be transparent and the players accountable to Parliament and to those with a stake in local government for implementing and reviewing its provisions, with a clear process under which the operation of the concordat and the central-local partnership can be discussed and tested by Parliament as well as being open to local government and public scrutiny.

My amendment, which I hope my noble friend will respond to sympathetically, achieves these objectives and will enhance and strengthen the quality and effectiveness of the central-local partnership. I beg to move.

7.30 pm

Lord Patel of Bradford: My Lords, the proposed new clause would place the relationship between central and local government on a legislative footing through an annual meeting and requirement to reach agreement on a set of principles. I understand clearly why my noble friend has moved the amendment and I would like to say for the record that I am grateful for his decision to do so at this stage of the Bill. He has been extremely patient. We agree with many of the sentiments expressed about the need to have the strongest relationship possible between central and local government and especially the need for a framework for principles on how those partners should work together and for a set of common priorities and shared programme of objectives to give effect to them.

As my noble friend clearly outlined, the central-local concordat was signed just over a year ago. We would say that it has the effect of all that this new clause describes. The difference, of course, is that it is not driven to do this by legislation. Indeed, I would contend not only that it does not need to have that status but that the amendment could be counterproductive to what should be an organic and flexible arrangement.

It may be helpful if I provide a little background. The central-local concordat, as my noble friend said, was jointly signed on 12 December 2007 by the Secretary of State for Communities on behalf of the Government and by the chair of the Local Government Association, Sir Simon Milton, on behalf of local government. It established a formal agreement on the reciprocal rights and responsibilities of local and central government and a framework of principles for how central and local government work together to serve the public.

However, it must be judged within a wider context. It stands within a clear and robust set of commitments that reinforce a new relationship with local government, which started with our 2006 White Paper Strong and

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Prosperous Communities
, through the initial concordat proposals in the Ministry of Justice Green Paper in 2007, to implementation of many of the policies under the Local Government and Public Involvement in Health Act 2007. It cannot, therefore, be set apart from all the changes that have been made to reinforce the right balance between local and central government—everything from the bonfire of targets and the creation of the highly successful local area agreements to the three-year funding settlement that has brought stability to local government funding.

Indeed, the central-local partnership, which acts as an overarching framework for ongoing dialogue between central and local government, has strong roots. As my noble friend will be aware, it has been in existence since the initial framework for partnership agreement was signed in 1997 by Sir Jeremy Beecham and the then Secretary of State for Environment, Transport and the Regions, the right honourable John Prescott. It is one of the mechanisms by which views can be frankly exchanged between central and local government. In recent times, the partnership has come together at key junctures in central-local relations; indeed, it has done so, for example, to discuss the empowerment White Paper. As my noble friend said, it met recently on 24 February to discuss the economy. It was hoped that some of the important issues raised by my noble friend were to be discussed then, but the economy was so important that the meeting was unable to follow up the issues around the concordat, as it had wished. However, a number of actions from this meeting are being followed up. A key number of activities will be followed up on the business issues, and commitments have been made to look at businesses at this difficult time. The meeting was fruitful.

It is this opportunity to share information and judgment that is the great benefit of the CLP, bringing together government at the national and local level in a flexible and action-focused way to do all that we can together to best meet the needs of the country. The CLP offers a number of routes to achieve this, such as subject-specific meetings with government Ministers and local government representatives as required, time-limited working groups, informal events and meetings between the Secretary of State for Communities and Local Government and the chairman of the LGA, including LGA office holders.

There is nothing to be gained by putting such a process into a legislative framework. It has to work because the partners involved want it to work and make it work for them. Indeed, to commit to a specific timetable of high-level, formal meetings would be counterintuitive, given that some issues may need to be dealt with quickly and may not require such high-level, across-the-board input.

However, my noble friend raises some key questions about the partnership’s future role and how it will develop. Because of the urgent need to the focus on the economy, as I said, the meeting on 24 February did not provide the opportunity to discuss that. However, I reassure him that the Secretary of State for Communities and Local Government and the new chairman of the LGA, Councillor Margaret Eaton, have agreed that it would be appropriate to take stock of progress on the

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concordat and to address some of the shortcomings that my noble friend has highlighted. His points will be a useful record of the shortcomings when that happens.

My noble friend also raises an important issue about knowledge of the concordat. I am happy to confirm that we will act to raise awareness of those issues. I stress that the signing of the concordat at the end of 2007 was the beginning rather than the end of the journey. However, the concordat clearly offers an opportunity to do more. Local and central government are committed to developing that partnership in this way and to continue to raise the profile of the agreement with government colleagues. I can also confirm and again reassure my noble friend, I hope, that, subject to LGA agreement, the Secretary of State for Communities and Local Government is committed to greater public recording of the activity of the central-local partnership, such as notification that formal meetings are taking place and publication of the notes of such meetings, which would also be laid in the Libraries of both Houses. I hope that this goes some way to further reassure the noble Lord of the Government’s commitment to the central-local partnership and to address his particular concerns regarding the reporting of the operation of the partnership to Parliament.

I hope that I have reassured the noble Lord that his new clause would not provide the answers that he seeks but would instead reduce the flexibility of the current arrangements and impose a potentially burdensome process on both central government and local authorities. I also hope that, with the reassurances that I have given that the Secretary of State and the chairman of the LGA will take stock of progress on the concordat, and our commitments to greater public recording of its activities and raising the issue of knowledge of the concordat, the noble Lord will withdraw his amendment.

Lord Rosser: My Lords, I thank my noble friend for that reply. He has made some helpful comments on the record. Obviously I do not share the view that my amendment is somehow burdensome, bureaucratic or cumbersome. It would provide for convening an annual meeting with representatives of central and local government and it talks about how you would comply with the framework of principles that are enshrined within the concordat. I would hardly regard that as particularly burdensome.

I repeat that the last paragraph of the concordat—signed, as has been said, by Councillor Sir Simon Milton and the right honourable Hazel Blears MP—says:

“The partners to this agreement will come together regularly in a renewed Central-Local Partnership. One of the roles of that partnership will be to monitor the operation of this agreement, and to revise it for the future as necessary”.

That was in December 2007. I suggest that that has not yet happened. I inferred that from my noble friend’s comments about there not being time to do it at the February meeting because the economy was discussed. That raises the question of what happened to prevent the meeting from being fitted in between December 2007 and February 2009.

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Anyway, I take it from my noble friend’s helpful comments that at least tabling the amendment and having this debate, with a few questions being asked, may have prompted some action by the parties concerned to see that the concordat and the central-local partnership work. In the light of that, I beg leave to withdraw my amendment.

Amendment 169 withdrawn.

Clause 136 : Adjudicator’s power to make corrections

Amendment 169ZA

Moved by Baroness Hamwee

169ZA: Clause 136, page 81, line 29, leave out “remove” and insert “correct”

Baroness Hamwee: My Lords, I shall also speak to Amendments 169A to 169D. These amendments take us to the part of the Bill that deals with construction contracts. I am grateful to my noble friend Lord Tope for dealing with the matter in Committee; I was unable to be there and am sorry to have missed it.

Taking the amendments a little out of order, I will first address Amendment 169A, which is in the same form as the amendment that was tabled in Committee and came to us from the RICS. A long letter from the Minister picked up a variety of points that were raised in Committee and reference was made to this amendment. He pointed out that since the RICS briefing to support the amendment in Committee there had been a High Court judgment in the Linnett v Halliwells case, which spells out—I am dealing with adjudicators’ costs—that it is not just the referring party to whom the adjudicator can look for payment of his fees and expenses.

The RICS feels that the matter needs to be addressed by tweaking the legislation, if I can put it that way. It makes the point that the High Court judgment is a first-instance judgment, which is subject to appeal, and that it may not apply in Scotland, when it would be desirable for there to be consistency across England, Wales and Scotland. The provision in the Bill, which I seek to amend, concerns the parties to a dispute. The Linnett v Halliwells case is about the adjudicator. As drafted, there would be no power to allocate fees and the provision in the Bill, as a consequence, bans positive cost clauses allowing the adjudicator to allocate costs fairly, which the RICS says is a matter of contract and not primary legislation.

The RICS has referred me to the Scheme for Construction Contracts (England and Wales) Regulations 1998, which apply in default and have the same effect as the amendment would have. It is concerned that, where a contract has adopted that scheme, it would be knocked out under the current Section 108A. It also says that the case has already had an adverse effect, with injunctions being sought in order to avoid the issue, which overloads the courts and is not desirable. It is not only the RICS that has concerns about the situation. I hope that the Minister will be able to give me some assurances about how the Government intend to address those concerns.

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The other amendments were all drawn to our attention by the Law Society of Scotland. I will deal with them perhaps so briefly as to be telegraphic. These are such technical areas that one would need to write quite an essay in order for them to be clearer to those who are listening than I probably will be in my casual way. Amendment 169ZA would delete the word “remove” and insert the word “correct” in Clause 136, which provides for a new provision in the 1996 Act to allow for the correction of a,

The Law Society of Scotland was concerned that that might mean that the error was removed and a gap left.

Amendment 169B would delete subsection (4) of new Section 110B to be inserted into the 1996 Act under Clause 139. This measure deals with interim payments under building contracts. I understand that the practice is for cumulative applications for interim payments and that the effect of the new provision is that a failure by the potential payer every month to redispute the item would mean that it would be due if the payee issued a notice. The Law Society of Scotland says that the introduction of a payee notice system in default of the payer’s notice may be desirable, which is what is provided, but that new subsection (4) goes too far. Therefore, the society seeks its removal.

Amendment 169C deals with a withholding made by a payee. The amendment would ensure that a payer may issue a notice only on the grounds that would be available under Section 111 of the 1996 Act. It could not be used by the payer to change the sum otherwise due—for instance, where the payer misses the timescale for the issue of a payer notice.

Finally, Amendment 169D would ensure that the entitlement of a party exercising a right to suspend performance for non-payment to recover reasonable costs and expenses was treated as an implied term. That would be achieved by inserting two additional subsections.

I appreciate the work that has gone into getting the changes to the 1996 legislation to this point and I know that the Government have undertaken considerable consultation. Clearly, that is not the end of the process. There would have to be a change to the scheme to which I referred and it will take a little while for these changes to come into effect even if work starts next month. It might be helpful if the Minister could give the House some idea of how long that is likely to take and what will follow from the primary legislative changes. This will not be the end of the discussion and there will be further opportunities for all those concerned in the industry to ensure that the practical arrangements are those that they feel they can operate, as well as to pick up some of the points of principle to which I have referred. I beg to move.

7.45 pm

Lord Brett: My Lords, the amendments in this group cover the three areas in Part 8; namely, adjudication, payment and suspension. I will deal with them in that order, starting with adjudication. The noble Baroness has proposed Amendment 169ZA, which would apply to Clause 136 and is known in the trade as the “slip rule”. The amendment is unnecessary and it is based

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on a very narrow reading of the clause. For example, if an error is created by adding 7+7 and getting the answer 13, simply removing the 13 does not solve the problem. It is resolved only when a correct answer—in this case, 14—is inserted. I hope therefore that the noble Baroness will understand why we are resisting this amendment.

More substantially, she has tabled Amendment 169A, which concerns the adjudicator’s ability to award his or her fees and expenses. Since Committee stage, we have discussed the issues around this amendment with the Construction Umbrella Bodies Adjudication Task Group. We have also had the opportunity to fully consider a recent and very relevant High Court case, to which the noble Baroness referred—the Linnett v Halliwells case—and how this would work in Scotland.

Rather than follow the suggestion put forward by the noble Baroness in her amendment, we are minded to simply “carve out” contractual agreements which allow the adjudicator to award his fees and expenses. We believe that such an amendment will have a not dissimilar effect to the amendment that the noble Baroness is proposing. We will look at this further and think how to move forward on this when the issue comes before another place. I will ensure that noble Lords are made aware of any such developments. Therefore, I hope that the noble Baroness will understand why we are resisting this specific amendment while recognising the problem lying behind it that she has raised.

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