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Amendment 13 provides that copies should be made available not only at the principal office of the levying authoritythat would be City Hall in the case of London, county halls elsewherebut also locally at the principal offices of the relevant billing authorities. In London, this would be at the main offices of the London boroughs. In other areas, it would be the district offices.
The Minister at the previous stage said that the Government did not want to overprescribe, and in general we support that. However, the Bill must look first to the interests of the consumerthe ratepayer. The arguments against these amendments in the Commons were not persuasive, and our Minister, if I may put it that way, had to defend something that was not only indefensible but frankly not worth defending. The reference to summaries is included because the prospectus will be a technical and probably pretty heavyweight document, and should be accompanied by something that is short and with which ratepayers can get to grips without difficulty.
The third amendment concerns its availability more locally. It will still not be available in many places. There will be the webI dare say that most businesses liable to the BRS will naturally look to the web for information. However, if a hard copy is requiredand the Government seem to think it is, because they are providing for hard copiesits availability should be more local than the Government seem to think is necessary. It really is a token gesture to have a hard copy available at the principal office of the levying authority, given the distances that in most cases would have to be travelled.
Lord Bates: My Lords, I am delighted to support the amendments. I do not have a great deal to add to the words of the noble Baroness, Lady Hamwee. However, I will make a few points about easily understood explanations.
The amendments take on a new significance in the light of Amendment 1, which has been passed, because we now hope to find that businesses will be asked their opinion on all of the schemes that are put forward. Therefore, they will need an easily understood explanation. The discussion in Committee was well informed, contained lots of ideas and was genuinely constructive in coming forward with proposals. The point was made that, in tough economic times, officials in government departments, and even officials in local authorities, may have the time to construct, read and digest the implications of a 100, 200 or 300-page document and prospectus, complete with various legal and contractual requirements and the financial statements that will be there alongside the details of the scheme. However, if you are a business person who is struggling to make ends meet and to get through very difficult times, you are unlikely to want to print off 300 pages and read through them. Therefore, the requirement to provide a succinct summary that communicates the essential elements of the proposal seems to us an eminently sensible idea which most people would support.
When we discussed this in Committee, the noble Baroness, Lady Andrews, gave as one of her arguments for not accepting the proposal the desire not to prescribe to local authorities how they should conduct this whole process of communicating with business rate supplement payers. However, Clause 5, headed Prospectus, contains several statements about what should be contained in the prospectus and how it should be presented. It states that electronic copies should be provided on the website and that a levying authority should,
That is quite a micro-level of stipulation as regards what should happen with the prospectus. Therefore, I do not think that the Governments arguments as presented in Committee stand up to careful scrutiny. These are very sensible amendments. I should have thought that if the Government want to ensure that these business rate supplement schemes are successful, the best way to do so is to ensure that people have the right information in the right proportion which answers the questions about which they are concerned. I should have thought the Government would want to accept these amendments in a sense of enlightened self-interest rather than refuse them. They are perfectly reasonable amendments and I am very happy to support them.
Lord Davies of Oldham: My Lords, I am grateful to noble Lords who have spoken in this brief debate. Of course, the Government wholeheartedly support the principle behind this group of amendments; namely, that levying authorities prospectuses must be easily available and clearly understood. As my noble friend set out in Committee, the Bill contains a minimum framework of requirements on levying authorities in terms of their prospectuses to leave room to make the right arrangements locally. We continue to believe that
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Baroness Hamwee: My Lords, it must be such a difficult job being a parliamentary drafts person, and a Minister defending a draft and not wanting to have the ignominy of giving way, even on a little point such as this. I suppose that I have been there in another life. That is a pity but I am very grateful to know that guidance should extend to this. The noble Lord did not quite confirm that but said that the Government would look at the points. This is not a party political point. I am not trying to cause the Government to fall over it. It is simply common sense, but common sense also tells me that I had better beg leave to withdraw the amendment.
These amendments deal with the contents of the prospectus in Schedule 1. Amendment 15 would require the inclusion in the prospectus of information about the costs of maintaining and operating the project and the funding of that. These are important matters for rate payers. They are likely to want that information in order to assess the project. Their assessment of its viability must extend beyond simply, in the case of a capital project, something material and concreteI do not necessarily mean that literallyto something beyond the construction of it. A project will not work unless its operation has been thought through. Paragraph 3 of Schedule 1 says that the prospectus must include:
which the local authority has undertaken on the feasibility of the project. This amendment would require that work to be undertaken. Paragraph 5 deals with the authoritys assessment of the impact of the BRS, its benefits and the relationship between the information given about the impact and the benefits. However, these assessments do not extend as far as the provisions of my amendments; they do not quite cover the issue. In Grand Committee, the Minister said that if the levying authority plans to use the BRS for maintenance and operation, it will need to set that out in the prospectus. I accept that but that is not the point of my amendments and is not what I am driving at here.
Amendment 17 would provide for an explanation of the proposed project managementsomething that I think most businesses would be interested inand of how the project, when completed, is to be managed and its governance arrangements. The amendment that I tabled in Grand Committee was obviously not sufficiently clear as it was answered as if I was proposing that there would always be a special purpose vehicle. I am not proposing that. Sub-paragraph (b) of Amendment 17 states:
The arrangements about making representations are crucial and would be a significant addition. A good local authority will allow that anyway. This is more than can be covered by guidance about the provision of information. Making representations and allowing for them have different requirements.
The noble Lord, Lord Bates, will speak to Amendment 16A. I am flattered by the replication of some of my terminology, but not quite flattered enough to be able to support the requirement for the representation of ratepayers on the governing body. That is not appropriate. At the previous stage I likened ratepayers to shareholders. I accept that shareholders vote on who is on the board and can make representations. In this model, one would expect that, if investors or third parties are involved, they would have contractual rights but would not be part of running the show unless that is part of the deal that they have made to give the loan, or whatever form their investment might take.
I also wonder whether it would be possible for an individual to act as a representative, or even a delegate, of all businesses in the area. I hope that the noble Lord can cover this. There will be quite a range of interests concerned and this will not be easy. Indeed, it may have the seeds of something a little dangerous if one is persuaded that, by this sort of arrangement, the interests of ratepayers can be hived off in some way and represented by a board member, or even two board members. The interests of ratepayers should run through all decisions and not be regarded as something tacked on, with lip service paid to them. I beg to move.
Lord Bates: My Lords, I support the amendments that have been spoken to by the noble Baroness, Lady Hamwee, and will speak to Amendment 16A, which is
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First, it is just good practice for people to contribute to the scheme. The Minister referred to giving comfort to banks if capital-raising was involved in the scheme. The banks might take comfort from various aspects of the difficulties involved in raising additional funds. I would have thought that the banks would certainly be comforted to see strong representation on the board of the bodywhether it is a committee or councilof the business community. This shows that it is not just paying lip service and that they are there not only as token representation but to give meaningful input. The business community brings great expertise in the whole area of financial management, project management and procurement. If the objective of this legislation is economic regeneration, as the Government keep reinforcing, surely there are no better people to articulate what will work in improving the business environment than the businesses themselves. We would like to see that.
We had a detailed debate on this in Committee. Several points were raised. Essentially, they distilled down to the purpose of this amendment. The Minister gave pretty categorical assurances, as the record will show, that there would be absolutely no question but that businesses would be expected to be involved from start to finish. She reiterated at col. GC 521 on 18 May 2009 that this was the case. Her expectation was that businesses would be involved at every stage. Our response was, perhaps, a fraction prescient. We said that, although a clear assurance was given by the Minister at the time and she is absolutely trustworthy on these matters, Ministers move from time to time, at the behest of the Prime Minister and to other opportunities in government. Therefore, one of the advantages of having such a provision in the Bill is that it will give some continuity. In many ways, that concern has been reinforced in light of the events that we have heard about.
Amendment 16A recommends two things. First, it mentions accounts being made available for the project as a whole and to keep the budget in check. That would be sensible. Those elements are really the only two that add anything to the amendments that have been tabled by the noble Baroness, Lady Hamwee. As well as the financial statements, it recommends representation on the board, which should be regarded as entirely helpful. It is something that, in Committee, the Minister gave the warmest possible support to, in principle. Perhaps, when the Minister responds, he will make similar warm noises. I am afraid that for the reasons I have outlined, the structure for the engagement of the business community in the project throughout is so important that it should be in the Bill, and I give notice that if the Ministers response to Amendment 16A proves unsatisfactory, I will test the opinion of the House.
Lord Davies of Oldham: My Lords, I am grateful to both noble Lords for moving and speaking to their amendments. The noble Lord, Lord Bates, indicated
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We have considerable sympathy with the sentiments of both noble Lords. The issue is whether the Bill needs to be amended to give effect to their points. The Government have thought seriously about these issues and the way in which we envisage the legislation being enacted meets noble Lords points. Of course levying authorities will need a wide range of information in the economic assessment of their proposals to be included in their BRS prospectuses. I am happy to put it on record that we expect that assessment to include consideration of the long-term viability of projectssomething that businesses will be and should be only too ready to press authorities on. It cannot be expected that businesses conduct themselves without being reassured about the viability of the project and its longevity. I can also reassure noble Lords that ongoing running costs will, under the guidance which we have issued, be included in the assessment of total project costs for the purposes of determining whether a ballot is required. Business will be fully informed on that front. I want to provide reassurance on Amendment 15 in those terms.
Amendment 16A, to which the noble Lord spoke, and Amendments 17 and 18, which revolve around the same areas, require the levying authority to set out in the BRS prospectus the proposed management arrangements for a projects lifetime, and for when it has been completed. It is crucial that businesses feel that they can have confidence in the running of the project, but I do not consider the amendments to be necessary to provide this assurance. In fact, the amendments are overly restrictive and do not reflect the fact that each BRS is likely to be unique. After all, we considered an amendment a moment ago which sought to restrict the BRS to London and Crossrail. The noble Lord thinks that the BRS has unique factors. In fact, he would have restricted it to one feature. No, we want the BRS to be more available than in that example, as I indicated in my response to the proposal at that time. However, we recognise that each BRS is likely to be unique and, therefore, it is difficult to be prescriptive about what information is required in quite the way that the noble Lord and the noble Baroness suggest.
The use of the BRS is likely to vary in terms of the type of project that the supplement will fund and the proportion that the BRS will contribute towards the total cost of the project. Requiring levying authorities to set out the proposed governance arrangements, once a project is completed, appears to assume that the BRS will always be used to fund, or part fund, infrastructure projects. However, in some cases, it is important that infrastructure built by use of the BRS be maintained. There is no point in building the infrastructure in the first place if there is no maintenance in the long run. That is the burden of the noble Lords anxiety. However, we envisage that the BRS may be used for entirely different projects, including revenue projects and for training. They may not necessarily have a legacy that involves ongoing project management and governance arrangements. Why should we be so prescriptive that local authorities can undertake with
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Therefore, determining what, if anything, will be the ongoing needs for the management of the project can be decided only on a case-by-case basis. We need to provide levying authorities with the ability to respond flexibly to the needs of individual projects and that is why we have eschewed the concept of being overly prescriptive in the legislation. I hope that noble Lords opposite who have moved and spoken to their amendments in good faithI respect their concerns about these issueswill also respect the Governments position and why we need to preserve flexibility.
The BRS prospectus will make it clear how those paying the supplement can expect to be kept informed about how much revenue has been raised in the BRS and how it has been spent. Paragraph 11 of Schedule 1 requires levying authorities to make it clear in their prospectus how those liable for the supplement will be informed about the expenditure incurred on a BRS project. The obligations on the levying authorities are quite clear, therefore, and we have them in the legislation.
Local businesses will also understand how they will be kept abreast of the progress being made. We intend to ensure that, which is what the amendments seek. We are fully seized of the necessities that the noble Lords have suggested. The fact that the arrangements will be set out in the prospectus provides local businesses with an opportunity to give feedback on the proposed arrangements for sharing information about the progress of the project.
We expect that successful BRS projects will be developed in partnerships. That is the best guarantee of the flow of information between the partners and that all those who are playing their part are fully apprised of what is involved. The appropriate level of managerial involvement with any project will depend on the specific circumstances of each individual project. To attempt to control the Governments arrangements could lead to an overemphasis on the BRS aspects of a project. This could result in other aspects of project governance related to other funding streams not being as good as they might be.
I understand the concerns. It is not that the Government have not thought about these issues very seriously indeed. We want, however, to avoid overprescription and, although I cannot agree with the amendments because I believe that the Bill makes adequate provision, I agree with the logic and principles underpinning them. The Government intend to signal in guidance that levying authorities should clearly share their information in an open, timely and clear manner throughout the project and consider the right role for business in the delivery of the project. These, after all, are based upon partnership and business will in many instances have a crucial role in governance. I do not think, however, that in legislation which covers a range of projects which we cannot foresee in detail and which might embrace a range of concepts, we can or ought to be prescriptive. I hope that the noble Baroness will therefore consider that she can safely withdraw her amendment.
Lord Davies of Oldham: Projects will vary. That will inevitably be the case in most projects we can envisage because it is quite clear that businesses will have an interest in the management. They will have a right to leadership in the management. After all, they will be making a contribution, and we would expect that to be the case. We are asking the noble Lord to accept that if we are prescriptive in the Bill, we will set up a particular form of management structure which may not obtain in all cases, particularly as we are not prescriptive about the level of contribution that the BRS might make to the overall project. The moment we get into any attempt at definition of participation in that formal sense, therefore, we are involved in being prescriptive in a way which the Government seek to avoid. It is not because we cannot see how partnerships could develop without a recognition of the role of governance in most cases, but if we put it in the Bill, we have to cover every case in circumstances where a wide variety of projects is likely to be put into effect.
Baroness Hamwee: My Lords, I am obviously glad to hear about guidance. With regard to my Amendment 15 about the costs of maintenance and operation, any authority with its wits about it will include that information and take the consequences by way of the businesses response if it does not.
and to reflect the case-by-case nature of these arrangements, to which the noble Lord has alluded. I am certainly not envisaging the BRS funding only capital construction. The noble Lord said that capital programmes would not be embarked upon without the maintenance being thought through. Oh dear, I do wish that were the case but sadly that is not always so.
According to my reading, the schedule is not sufficiently extensive to cover the points that I have made. I do not want to use the word nannying but the noble Lord was very protective of the amount of work that ratepayers would have to do in getting to grips with the prospectus and he urged me not to add to it. However, I think that the prospectus will inevitably be complexit will not be adequate for its purpose if it is not.
As regards the amendment of the noble Lord, Lord Bates, although he did not directly answer my question about whether one or two individuals could represent all businesses, I think that the implicit answer to my question was, Yes, they can. The noble Lord is nodding and that is on the record. I am interested in the Ministers response. He castigates the noble Lord for envisaging only a single governance model, but the noble Lords amendmentI am arguing against myself hererefers to the,
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