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The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, I should like to thank the noble Lord, Lord Harrison, for raising this important and timely question on what steps the Government are taking to improve corporate governance and accountability on social and environmental issues, a subject that I have some knowledge of, because I wrote the first corporate and social responsibility document for Cadbury Schweppes, and, well you see where it got them. I am therefore going to try to answer as many questions as possible as I go through, because this really has been a most engaging debate. I am amazed that we have
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As my noble friend Lady Bottomley stressed, strong corporate governance must be at the heart of successful capital markets which work both for companies needing to raise capital and investors looking for solid and sustainable returns. It is essential for the long-term health of our British economy. It is equally clear that accountability and transparency are the bedrock of a vibrant corporate sector. They build trust and, as the noble Lord, Lord Harrison, said, underpin business decision-making and long-term performance. Britain has been a pioneer in developing high standards of corporate governance but we are far from complacent. A few weeks ago my right honourable friend the Secretary of State for Business announced that he had asked Professor John Kay to lead the review of the effect of British equity markets on the competitiveness of British business. This will address issues of vital importance to the long-term performance and governance of British quoted companies. I am delighted to note the support of the noble Lord, Lord Harrison, for the Secretary of State's thinking on this.
My noble friend Lord Patten asked whether the Government will introduce further regulation. As we said in the call for evidence, on a long-term focus for corporate Britain the best solutions are those which are owned and driven by market participants and investors in companies. Therefore, we want to work with the companies and the City to develop business-led solutions.
My noble friend Lord Newby asked whether the Government should review fiduciary duties. The Kay review will consider whether government policies directly relevant to institutional shareholders and fund managers promote time horizons and effective collective engagement. If that is not clear, we will write. I am not sure whether I answered that correctly. We recognise the importance of social environmental issues to the long-term success of businesses. All directors have a general duty to have regard to the impact of the company's operations on the community and the environment. That is reflected in the way in which they report to their shareholders, notably in the business review part of the company's annual report.
The purpose of the business review is to help shareholders assess how the directors have complied with this duty. Quoted companies must provide information in the business review about environmental, social and community issues to the extent necessary for an understanding of the company's business. Some companies already make high-quality disclosures but the standards are not applied consistently, as we have heard. Getting this right is crucial if we want to achieve balanced and sustainable economic growth. In the growth review, we gave a clear commitment to simplify the reporting framework. The work we have been doing on narrative reporting is important. Our aim is to give shareholders the information that they need to make well informed decisions without adding to the regulatory burden.
The noble Baroness, Lady Sherlock, spoke of introducing a higher audit requirement. In July, the Government will consult fully on these matters. They will of course need to avoid placing additional regulatory
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The noble Lord, Lord Harrison, asked what constitutes adequate reporting and assurance of the information contained therein. I thank the noble Lord for that question. An adequate report meets the needs of investors and, as such, investors should engage with companies to determine specific standards of assurance.
My noble friend Lord Patten asked whether the Government will introduce more regulation in narrative reporting. We want to ensure that we have the right framework, which would be a win for everyone. Boards should face less complexity and shareholders and other readers should be able to access information more easily. That means removing any duplicate requirements, improving guidance and making it easier for companies to adapt to national and international developments. Our consultation, which will run from July to October, will consult on proposals to address these aims and we look forward to receiving the views of many noble Lords who are here tonight.
The noble Lord, Lord Haskel, asked whether the Government will support a branding exercise. The Government support a range of industry-led awards in this area, which have proved to be very effective. They will continue to support these and I would encourage the noble Lord to help us in this.
The noble Baroness, Lady Young, asked whether the Government will bring forward proposals specifically to drive up the quality of social environmental reporting as indicated in the coalition agreement. The answer is yes. The Government's consultation will address the issue of how social and environmental reporting can be better integrated into the narrative reporting framework to drive up the quality of the disclosures of this information.
In answer to the question asked by the noble Baroness, Lady Sherlock, no decision has been taken yet on whether to regulate. The consultation is aimed at understanding whether regulation is necessarily the best way to ensure consistency in reporting. My noble friend Lord Newby and the noble Lord, Lord Whitty, asked whether the time has come to review the reporting of environmental emissions. The Government have launched a consultation to consider options including a voluntary alternative to promote more widespread and consistent reporting of greenhouse gas emissions by companies in their annual reports. This was an open consultation with no preferred option. It closed today and it will report in the autumn.
We must keep an eye on the European and international agendas. Commissioner Barnier published his Green Paper on corporate governance in April and the Government will respond to it, ensuring that Britain continues to play a key role in shaping European thinking. My right honourable friend the Secretary of State for Business will be taking forward our thinking in the international arena this summer.
The noble Lord, Lord Harrison, asked whether proposals will be brought forward specifically to drive up the quality of social and environmental reporting as indicated in the coalition agreement. The answer is yes. The Government's consultation will address how social and environmental reporting can be better integrated into the narrative reporting framework to drive up the quality of disclosures of this information.
Better governance is allied with stronger corporate responsibility, an issue we take very seriously. It is not just about businesses not doing harm; it is about them helping to build a better society. We are committed to helping businesses succeed so that they create the jobs, the wealth and the opportunity that our country needs. We want to encourage enterprise and make it easier for small firms to grow. Our commitment to business and the commitment we are asking for in return from all businesses, large and small, is set out in Every Business Commits. This responsibility deal between businesses and the Government asks them to show that they are serious about meeting their social responsibilities by, among other things, protecting the environment and supporting communities.
Finally, I should like to mention the recent review by the noble Lord, Lord Davies, Women on Boards, which highlighted the low numbers of women reaching senior positions in our companies. The report set out a body of evidence that showed that diverse boards are in a better position to make good decisions. A company and its shareholders profit from this. As a result of the report, things are already changing. The Financial Times reports that in the first two months of this year, 35 per cent of new FTSE 100 board appointments were women. If there is not enough change in the next few years then the Government will consider what further action they will take. However, the key recommendations of the noble Lord, Lord Davies, are for companies themselves. These are aimed at the larger companies, the FTSE 100 or 350. However, I would hope that all companies will think about the report and about how they can benefit from its findings.
The noble Lord, Lord Harrison, asked some detailed, important and pertinent questions about pensions as did the noble Lord, Lord German. My answer to them both is, as I have no doubt the noble Lord, Lord Harrison, knows, pensions are the responsibility of the Department for Work and Pensions and I will liaise with colleagues in DWP and write to both noble Lords to ensure I provide a coherent and joined-up answer.
As we work through these issues our conclusions will be informed by the principles underpinning our thinking on how to renew the corporate governance framework; a commitment to rebuilding trust; a determination to empower shareholders and a focus on protecting long-term values. We are not in the business of weighing companies and investors down with more regulation and higher costs but we are going to shine our spotlight on corporate governance to improve accountability and transparency and secure long-term, sustainable economic growth for United Kingdom companies. I wonder whether the noble Lord, Lord Harrison, would like to have a final thought. There is no reply but I am sure that if he wishes to-
Lord Harrison: Perhaps before the Minister sits down, I could thank her for her thoughtful reply. I look forward to some of the developments from the Government. I would like to extend my thanks to all Members who have participated in what was a very interesting and fascinating debate. I hope that we can return to it as matters develop. Once again, I thank everyone.
Lord Shipley: I shall also speak to Amendment 133ZB and I shall be very brief, because a number of the issues that I would have raised were raised earlier in amendments on this section. It is interesting that in this chapter, which has four pages, the Secretary of State is mentioned 19 times. It seems very odd that in a Bill about localism, the Secretary of State has to have 19 separate possible roles. My amendment is simply about how the timing and consideration of expressions of interest could be progressed. Put simply, relevant authorities would have to specify when these would be.
It seems to me that local government can be trusted to do more things for itself. Given that councils will have a power of general competence under this Bill, we might consider allowing them to prove that they are generally competent to do things for themselves and do not need the constant intervention of the Secretary of State in a whole range of ways which do not support the principle of localism. There is a key principle here: this is an example of where the powers of the Secretary of State could simply be written out of the Bill and local authorities could be given a responsibility for defining when expressions of interest could come in and when the authority would then consider them. As a consequence, the role of the Secretary of State and a considerable number of the 19 separate roles of the Secretary of State in this four-page chapter could be reduced.
Lord Greaves: My Lords, I have two amendments in this group, Amendments 133ZC and 133ZE. They are all about the maximum and minimum periods by which local authorities have to deal with expressions of interest and the rules and regulations that the
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Lord Beecham: My Lords, I also have an amendment in this group. First, I endorse what the noble Lords, Lord Shipley and Lord Greaves, have said in speaking to their amendments. My Amendment 133ZEA is effectively to replace the Secretary of State's regulatory function-again we come across the Secretary of State's regulations-with the relevant authority being allowed to determine and publicise the relevant periods between accepting an expression of interest and beginning the procurement exercise. That really ought to be a matter for local circumstances and local decision and not something prescribed nationally.
Lord Shutt of Greetland: My Lords, Amendment 133ZC would remove the Secretary of State's power to specify minimum periods for the submission of expressions of interest. Amendment 133ZEA would require relevant authorities to set and publicise minimum and maximum periods between an expression of interest being accepted and a procurement exercise starting. Amendment 133ZE would remove the Secretary of State's power to specify these periods, which would have a similar effect. We have taken these powers to ensure that power really is pushed down into the hands of communities.
The power to specify minimum periods for submission of expressions of interest will ensure that relevant bodies have sufficient time to prepare and submit them. The power to specify a minimum period between an expression of interest being accepted and a procurement exercise starting will, in particular, ensure that employees, where they are not the challengers, have sufficient time to decide whether they wish to organise themselves to bid, and do so effectively. This will support the Government's commitment to give public sector workers the right to bid to take over running the services they deliver. It should also help smaller and newer voluntary and community bodies. The power to specify a maximum period will prevent a procurement exercise from being unnecessarily delayed.
The majority of relevant authorities will, of course, act within the spirit of the right, but these powers will prevent a recalcitrant authority from specifying periods that are so short that they stymie relevant bodies wishing to use the right. However, following our recent consultation, we are carefully considering whether some discretion could be given to relevant authorities on the timescales associated with the process to enable them to take account of local circumstances.
Clause 69(2) gives discretion to relevant authorities to specify periods during which expressions of interest could be submitted in particular services. Amendments 133ZA and 133ZB would instead require relevant authorities to specify periods during which expressions of interest in a particular service would be considered, changing the emphasis of this provision. Relevant bodies would then be able to submit expressions of interest at any time. However, this amendment could result in expressions of interest being submitted so far in advance that they would be out of date by the time the relevant authority considered them. The time within
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Lord Greaves: From my point of view, if this provides a bit more flexibility to deal with local holidays and things like that, it is welcome, but the whole thing is still complete nonsense. The idea that local authorities need to be told exactly what the minimum or maximum periods are, or need new rules to say, "This is exactly the flexibility you can have to increase it, or reduce it, or whatever", is treating local authorities, as I said before, first of all like wholly owned subsidiaries of national government, and secondly like a kindergarten which needs to have its whole life organised for it by people from above. It is absolutely crazy and is typical of the entire ethos which lies behind the Bill. All the good stuff in the Bill is being ruined by this complete nonsense that local authorities have to be told what to do and how to do it in detail. I was thinking about this over dinner. I said before that it is to do with local authority cultures. Local authorities will never learn to be grown-up people who can make their own decisions and organise their own lives if this culture continues.
My honourable friend Andrew Stunell, one of the Ministers responsible for the Bill, complains almost every time I see him that he goes to local authorities and they keep asking him how they are going to deal with the new general power of competence. He says, "It is a new general power of competence and you yourselves will decide how you're going to deal with it". That is wonderful, but all through the Bill we have all these detailed regulations that go against that.
Local authorities nowadays will not do anything unless they have such regulations. So long as these regulations continue, local authorities will lack imagination and enterprise. They will be the opposite of what we want them to be. The civil servants and the Government have to let go. Until they do so, there is no hope.
Lord Shipley: My Lords, I agree with much of what my noble friend Lord Greaves has said. This is about the issue of competence. A power of general competence implies that people are able to do things because they are competent to do them, but for local authorities there is a separate meaning for "competence", which is the ability to do it. Local authorities have the ability to do it; maybe some do not but many do. Those that do not will have to grow in the role to enable them to do so. However, a four-page chapter in which the words "Secretary of State" are mentioned 19 times should not be part and parcel of a Localism Bill. I hope that between now and Report that further thought will be given to this and that someone somewhere might attempt to remove some of these mentions of the Secretary of State so that the words appear only where they really need to. I beg leave to withdraw the amendment.
"(a) decide whether or not to carry out a procurement exercise relating to the provision on behalf of the authority of the relevant service to which the expression of interest relates, and
(i) carry out such an exercise, or
(ii) negotiate with the relevant body on the terms on which the body may carry out the provision of the relevant service."
Lord Greaves: I have this somewhere. Sorry, my Lords, I got a bit carried away with the previous amendment and stopped sorting my papers out. I shall speak also to my five other amendments in this group. There is also a Labour amendment in the group.
Amendment 133ZD follows a pattern of debate and amendments on this chapter in that it tries to give local authorities more freedom to make their own choices and attempts to minimise constraint by the Secretary of State. It would give local authorities the choice whether or not to respond to an expression of interest with a procurement exercise. We discussed this in some detail in our debates on amendments before the dinner hour, so I will not go into that in any more detail now. This is an area that I think we will want to come back to in later discussions.
"A relevant authority must, in carrying out the exercise referred to in subsection (2), consider how it might promote or improve the social, economic or environmental well-being of the authority's area by means of that exercise".
This is a welcome provision, because it suggests that, as part of dealing with the expression of interest that comes in, the social, economic and environmental well-being of the authority's area has to be looked at. I assume that when it says "the authority's area", it also means the specific part of the authority's area that the expression of interest refers to. It would be interesting to have a comment on that. Subsection (7) then says:
This is simply an amendment to probe what that means in practice. I understand what it means on paper, but in reality what balance will be given when an authority is considering how to deal with a particular expression of interest, and particularly with the procurement exercise? If what really applies is the lawyers coming along and saying, "This is how this authority awards contracts, and this is how it has to be
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This might happen automatically, but it would be interesting to hear the Minister say what the Government's view is. Does this hand over a local service for ever, or is it the normal sort of contract that a local authority would have with an outside contractor to provide a service, which would be time-limited to five or 10 years, or whatever it might be?
"Any contract or other agreement that the relevant authority enters into under the provisions of this section may be subject to such arrangements for supervision, monitoring and assessment as the relevant authority thinks are necessary".
Is it a question of handing a service over to someone in the community, or an organisation comes in and takes advantage of the procurement exercise, who is then responsible for it lock, stock and barrel, or does the council still have a residual responsibility? Will it be treated like a normal council contract-for example, a contract for refuse collections and recycling-or is it something different? Will there be a lighter touch in supervision? Will there be any supervision whatever? If it is something that the council has a duty to do by law, and there is no supervision, how does that tie in with the council's duty?
"Any contract or other agreement that the relevant authority enters into under the provisions of this section may be subject to stipulations about the minimum level of services that must be provided and standards relating to their provision".
This is the same kind of argument. It is the kind of thing that would happen automatically with a normal council contract. Does it apply in this case? If it does not, what guarantees are there that a proper service will be provided in future?
in other words, if people are not providing the service that they said they would provide when they made the expression of interest and when the procurement exercise took place. If they do not provide the service, what happens? Is the council responsible for stepping in and doing something about it, or does it just hold its hands in the air and say, "That's tough, that's the way it is"?
In other words, if the provider is not performing adequately, can the council move in in default, as it can with a normal contract, and take over the service, or is it lost for ever once it is out in the community, even if it is no good?
Amendment 133ZJ would apply the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006, usually known as TUPE. Clearly, if it is a question of looking after a pocket park at the end of a street, that can simply be transferred to a community group such as the parish council. However, if these provisions were used to transfer a refuse collection service, TUPE provisions would normally apply. Do they apply in the case of transfers under this legislation?
The final amendment in the group, Amendment 133ZM, is headed "Application of duties". It seeks to investigate whether the Equality Act 2010 will apply in respect of the provision of a relevant service under the Bill. Will it be deemed to apply to the relevant body when that body is providing the service? If all you are doing is looking after a pocket park at a very local level, common sense suggests that the Act will not apply, but if you are transferring a service that involves employing people and providing a significant service such as social services to people, does the equality legislation still apply to those services, some of which might well be duties on the local authority that are being carried out by someone else? I beg to move.
Lord Patel of Bradford: My Lords, the noble Lord, Lord Greaves, has raised important issues, and I look forward to the Minister's response to them. I speak particularly to Amendment 133ZEC, which seeks to include a provision relating to expressions of interest. Clause 70(5) already calls on relevant authorities to consider the likely impact of any expression of interest on promoting or improving the,
I greatly welcome this and believe that it is an essential component of the consideration. However, I wish to strengthen it by including a consideration of equality. As noble Lords know, I have a long-standing interest in equality and feel passionately that this is a vital issue for all public services. I greatly welcomed the previous Government's introduction of the Equality Act and have watched with some concern the current Government's apparent retreat from many of the excellent provisions in that Act.
It seems appropriate that we should do all we can to ensure that equality is a prime consideration under the community empowerment chapters of the Localism Bill. The noble Lord, Lord Greaves, shares this concern. His Amendment 133ZM seeks to ensure that the provisions of the Equality Act 2010 that apply to relevant authorities will also apply to relevant bodies. I wish to go somewhat further than this as I believe we need to ensure that the existing equality requirements are strengthened. I wish to outline three reasons why this is important.
First, there is a risk that the community right to challenge could result in the exclusion of vital voluntary and community groups that currently empower people
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Secondly, many will judge the community right to challenge by the degree to which it delivers improved outcomes for the most disadvantaged members of the community and provides safeguards to protect vulnerable people, including older and younger people. If the community right to challenge is to be credible, it must provide tangible benefits for these groups.
Thirdly, we need to ensure that there is a level playing field. Many of the groups who will wish to take up the community challenge will work every day with vulnerable and disadvantaged communities, often with very scarce resources and capacity. These groups, which we know are often the best at reaching people traditionally neglected by statutory services, will face significant challenges in undertaking the process of competing to run services. In order to ensure that they are best supported in this process, a duty to consider equality would be really helpful. This is vital, especially if we are to ensure that the community right to challenge promotes and improves equality for local people and does not disadvantage vulnerable groups or negatively impact on the provision of local services. I hope that the Minister is a little bit amenable to this suggestion, and I feel very strongly that consideration of equality should be included in this important chapter of the Bill. I am sure the Minister will say that lots of the services are covered by this legislation anyway, but again the issue is about making it explicit so that people do consider it and we give the opportunity to some of those groups that traditionally would not get it.
Lord Shutt of Greetland: My Lords, I thank the two noble Lords who have taken part in the debate. I have several notes here for responding to these things, and if I do not pick everything, I hope I can write to them afterwards.
We have to remember as a preliminary to all this that this is the Localism Bill and there are some new things here, but that that does not get rid of old things. Therefore, if something is in the law at the moment, no other apple carts are upset. That is the fact of the Bill. However, Amendments 133ZD, 133ZJ, 133ZM and 133ZEC address areas in which existing legislation will apply and where services are contracted out following a successful challenge under the right. Amendment 133ZD would require a relevant authority accepting an expression of interest to decide whether it was going to carry out a procurement exercise, and either carry out that exercise or negotiate with a relevant body on the terms on which it may deliver the service.
Clause 70(3) already requires the procurement exercise carried out by the relevant authority following a successful challenge to be appropriate and have regard to the
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Amendment 133ZJ would require any contract that a relevant authority entered into following a successful challenge to be subject to the Transfer of Undertakings (Protection of Employment) Regulations 2006-TUPE. The TUPE regulations already specify the instances in which they will apply. We are not seeking to change those through the community right to challenge.
Amendment 133ZEC would require a relevant authority to consider whether acceptance of an expression of interest would promote or improve equality of service provision in its area. Amendment 133ZM would apply the duties with which a relevant authority must comply under the Equality Act 2010 when delivering a service to a relevant body delivering a service on its behalf.
Relevant authorities will need to comply with their duties under the Equality Act when delivering services directly, when considering expressions of interest, when contracting out following a successful challenge under the right, and when procuring services outside the right. As is currently the case, when contracting out services authorities will need to satisfy themselves that they have fulfilled their duties, for example by including appropriate requirements in contracts.
Amendment 133ZF would remove the requirement for a relevant authority's consideration of how it might promote or improve the social, environmental or economic well-being of its area through the procurement exercise, to be consistent with procurement law. The amendment would remove clarity where it is needed. A relevant authority considering how it might promote or improve the social, economic or environmental well-being of its area must do so in a way that complies with procurement law. Failure to do so provides a number of grounds for legal challenge.
Amendment 133ZH would enable a relevant authority to specify in relation to contracts entered into following a successful challenge: arrangements for supervision, monitoring and assessment; service levels and standards; and the action that may be taken by the authority where those are not met, including a procedure by which the authority may take the service back in-house. Relevant authorities can and do include requirements in contracts for performance and monitoring. The right does not restrict them from continuing to do so.
Amendment 133ZG would require contracts let following a successful challenge to be time-limited. Authorities enjoy the freedom to enter into contracts for whatever period is relevant to the needs of their service users and to the need to obtain value for money. The amendment would unnecessarily restrict that freedom. In other words, there is no prescription on that. That is not a regulation; it is not in the Bill.
Lord Greaves: My Lords, there have been a number of useful and welcome statements, which have helped us to understand how this might work. I will read them carefully, as usual. There are one or two other issues, such as the TUPE business, for which the Minister said that nothing has changed, but it might still be helpful to know how it might apply to different circumstances under the Bill. For the moment, I beg leave to withdraw the amendment. In general, they were very helpful responses, and I will read them carefully.
133ZDA: Clause 70, page 59, line 3, at end insert "but in the case of an expression of interest from a relevant body as defined by section 68(5)(d) only if a majority of the workforce likely to be affected by such a procurement exercise consents to it"
Lord Beecham: This amendment, and the other amendment in this small group, Amendment 133ZEB, relate to the situation where the challenge is made by two or more employees of the authority under the provisions of the Bill. The first amendment requires the consent of the majority of the workforce likely to be affected before the authority is obliged to accept the expression of interest. That seems a sensible precaution.
A previous amendment would have raised the number from two to five but, if I may say so, that is almost irrelevant. It would be wrong for a very small group of employees of an authority to have an expression of interest accepted without the support of people in the authority who might be affected by the decision to proceed with the challenge. I hope that the Minister would agree it would be essential in those circumstances for a majority of those who would be so affected to endorse the proposition, even if it were made by a relatively small number. It would not be a cumbersome or difficult exercise to test the opinion of the relevant workforce, and it would clearly be a sensible precaution.
The other amendment is based on concerns about the operation of EU competition and procurement law, particularly in the case of a service that had been carried out by the authority becoming outsourced. This is legal territory into which I venture with trepidation. It has never been my area of legal specialism; it is not an area in which perhaps many in my profession are all that confident. There seems to be a risk in these cases that when an undertaking has been carried out by a public body and outsourcing takes place with the relevant workforce, that may expose the procedure to the rigours of the competition and procurement laws that might then lead not to a community organisation taking over but a private enterprise, which is quite outside the intentions of the legislation.
The amendment would require the authority to take a view-and take advice, of course-about the potential problem. If it was not a problem, of course, the expression of interest could go ahead. If it were to be a problem the amendment would allow the authority
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Lord Shutt of Greetland: My Lords, Amendment 133ZDA would require that a majority of the workforce affected by an expression of interest submitted by employees of the relevant authority consented to a procurement exercise before it went ahead. We agree that employees affected by an expression of interest submitted by their colleagues should be engaged in the development of the proposal and we are looking at how this might be reflected in the requirements for an expression of interest. The face-to-face meetings, intranet updates and staff clinics undertaken when some 1,200 staff from the Hull Primary Care Trust transferred to a social enterprise under the NHS right to request scheme is a good example of how employees have been engaged in a proposal. However, when a local authority decides to undertake a procurement exercise for services outside the community right to challenge, there is no requirement to secure the consent of the majority of the workforce affected by it. This amendment may therefore act as a barrier to services being provided differently and better. Of course, the requirement for employers to inform and consult representatives and employees affected by a prospective transfer of employment will continue to apply.
Amendment 133ZEB would enable a relevant authority to reject expressions of interest when EU procurement or competition law is likely to apply. The Public Contracts Regulations 2006, which are part of our domestic law that implement EU procurement law, set out requirements in relation to procedures for advertising, tendering and awarding contracts when the value of the service is more than £156,000 for relevant authorities or the service is not otherwise exempt. Authorities will already need to comply with these requirements in deciding what kind of procurement exercise to carry out for a service, and will need to continue to do so following a successful challenge under the right. The amendment would enable relevant authorities to reject an expression of interest in all but the smallest services, dramatically reducing the scope of the right. I hope that the noble Lord will withdraw his amendment.
Lord Beecham: I will first deal with the rather strange analogy that the Minister has drawn between this situation where a small number of employees can precipitate a process and a situation where an authority decides to outsource. The noble Lord identified a case involving several hundred employees but it might well be even more than that. The trigger in that case is the authority; the trigger in the case in the Bill is potentially a handful of fellow employees making an approach under the provisions of the legislation, affecting
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In so far as the competition requirements are concerned, with respect, I think that the Minister is slightly missing the point that I am making, which is not about the general provision for procurement but about the particular circumstances that might apply to an undertaking of a public authority being outsourced by its workforce under the provisions of the Bill.
I understand that the Minister is not prepared to accept either amendment tonight, but I reiterate my request that these matters be looked at between now and Report. Otherwise, it may well be that we will have return to the issue at Report and potentially test the opinion of the House. However, at this stage I will withdraw the amendment.
Lord Greaves: My Lords, we now move on to Chapter 4 of Part 4 of the Bill, which relates to assets of community value and the compilation of lists of assets of community value by local authorities, the definition of community land, the procedures for including the land in the list, and so on. This is an important chapter. It is entirely new legislation, with new ideas
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I shall speak also to six other amendments in the group, which are in my name, and there are many other amendments in the names of other noble Lords. Amendment 133D, which leads the group, seeks to change the definition of what is to be in the list which the local authority maintains. Clause 74(1) states:
This is a probing amendment to probe the meaning of "land", "businesses" and "buildings", which are all referred to in this part of the Bill. There is also something more fundamental behind it, which is the question of what, in a community, is of value to people. As far as this proposal is concerned, is it land, or is it what people do with the land; in other words, the businesses? There is a fundamental distinction and it is worth debating. There is also the matter of whether land, as such, should be maintained on the register or whether it should be dealt with in some other way. We will come to those amendments in due course.
Lord Greaves: I do not know. If the local authority is maintaining a list of land or businesses of community value, it will no doubt be known as the list of assets of community value. Whether the words are required in legislation is something I have long since stopped wondering about. I am sure that some of us could get round a table and reduce the size of this Bill considerably just by omitting stuff that appears to add nothing. I am not sure that that is our job. I would love to go through deleting stuff, but the Government would not accept it. When I do, they do not accept it. I have no real comment on that.
The Bill refers to a building or land specified in regulations, as a definition of the buildings and land which perhaps ought to be in the list of community assets. Again, it refers to a building or land, and appears to refer to a particular building or particular land, but it seems to me that it ought to refer to a class of building or land or a category of building or land.
"For the purposes of this section "land of community value" does not include ... an allotment, common, open space, nature reserve or playing field in the ownership or management of a national or local authority or a charity whose purpose includes
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Amendment 136ZC defines the terms. As defined in the amendment, access land is land defined as such under the Countryside and Rights of Way Act 2000. It covers very large areas. For example, the whole of the Lake District is access land, either because it is urban common or because it has been described as access land. Very large areas of the uplands of this country are access land, and many places have commons that are access land. Clearly this is land of community value, which is why it has been defined as access land on which people can engage in what I believe is termed "recreation on foot". However, it would be ludicrous if all that land were to be included in this legislation. These amendments exclude it.
The list of allotments, commons, open spaces and so on removes from the Part 4 procedure land already reasonably protected by statute, and land where the present owners should not be encouraged to believe that they can offload it on other people or perhaps on public authorities. It is also desirable to simplify the creation of the lists. Many areas, large and small, are defined in this way and might be included. However, if they were it would be likely to lead to a large number of disputes that would be difficult to resolve.
The definitions of allotment, common and open space are similar to those in Clauses 163(3) and 183(10) in the London sections, which repeat definitions from previous legislation over the years. It should be noted that the definition of "allotment" does not include the normally understood meaning of allotment, which is either a statutory allotment under the Allotments Act 1922 or a council or other allotment probably let on an annual garden tenancy. These allotments are the specialist fuel and field garden allotments under an Inclosure Act, which some of us will remember discussing during the passage of previous legislation.
The amendments do not seek to prevent the transfer or leasing of any of these excluded classes of land to appropriate charitable organisations-by agreement and after full consultation with the public and those affected-but it should not be under the pressure of this procedure. These classes of land have protection that is long established and rather specialist, and it should remain.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, before we proceed any further, it might be helpful to Hansard and to the rest of the discussion if I give a short résumé of the purposes behind this part of the Bill. It has caused
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The idea behind this chapter is very simple. We know already that many communities, both urban and rural, have lost the use of buildings or land that were important to them because they were sold privately or without an interested community group having time to raise the necessary funds. There are instances of an adult education centre in Calderdale, a Methodist church in Cornwall and any number of village shops and pubs, as well as other community assets, which noble Lords will be aware of in their villages and towns.
Local authorities can, of course, already choose to transfer assets to local community ownership or management. They can do so on favourable terms where it will promote local well-being under existing legislation. The Government have actively supported this and want it to continue. The assets of community value provisions that we are considering today are aimed at situations where the local authority does not choose to do so, and at assets owned by other public bodies and by charitable or private owners. We are giving communities the right to nominate assets of community value and local authorities a duty to list them if they satisfy certain criteria. Then, if-and only if-the owner of a listed asset decides to dispose of it, he or she will not be able to do so for a defined period. This will allow interested community groups the opportunity to prepare a business plan and raise the necessary funds to bid for the asset. The owner will not be restricted in marketing the property in preparation for its disposal during this period. The word "disposal" is used as opposed to "sale" because these provisions will apply both to freehold sales and to the granting and assignment of long leases. Those will be the definition of "disposal". However, I can assure your Lordships that it is our clear intention that the provisions will not apply to transfers made by inheritance, gifts or transfers between family members and between partners in the same firm or trustees of a single trust; these will be able to proceed unimpeded.
We are continuing to explore other appropriate exemptions, and I would like to address these and other issues concerning the operation of the moratorium rules when we consider Clause 82, which may not be today. I also want to stress that these provisions do not restrict in any way the freedom of the owner of a listed asset to dispose of it to whomever they choose and at whatever price they choose. They only affect when they can do so. Furthermore, they do not confer a right of first refusal, unlike the Community Right to Buy scheme that operates in rural Scotland. Also, they do not directly place any restriction on what an owner can do with their property, once listed, while it remains in their ownership. This is because it is planning policy that determines the permitted use of a particular site. An owner can, of course, apply for planning permission for change of use; this will be dealt with by the local planning authority in the normal way. In that situation, the authority may consider the fact that an asset has been listed as a material consideration, or they may not.
We are acutely aware that we have to balance the community benefit that these provisions will bring with the rights of property owners. That is why we
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The Bill allows for the payment of compensation, and it is our firm intention to put in place a compensation scheme, administered by the local authority, which will consider claims for costs and loss incurred by non-public owners-that is, private owners-in complying with the requirements of the scheme.
The Bill provides for a number of more detailed aspects of the scheme to be set out in regulations. This will make it possible to review how those provisions are working after a year or two and to make adjustments if they appear necessary. It has also allowed us to consult widely on the details, and we have been carefully considering the 256 responses to the consultation, which ended on 3 May. They will inform our views about this as we go along.
There is another balance to strike. On the one hand, consistency across the country is desirable, giving certainty for interests represented nationally. This could be achieved by putting more detail in the Bill or in regulations. On the other hand, in encouraging localism, we want to allow local authorities to use their discretion and respond to local circumstances and views. There are amendments before us, which we will discuss in a minute, that support both these points of view, so following careful consideration of all the representations we have received we believe that certain things should be set nationally to ensure fairness, to safeguard people's rights and to make it easier for citizens and communities to make use of these provisions alongside the others in the Bill. However, we also believe that there is considerable scope for local decision-making, and our intention is to use delegated powers frugally to ensure appropriate local flexibility.
We expect the debate to focus on four aspects of the provisions in particular. The amendments suggest that this is right. They are the definition of an asset of community value, who has the right to make a community nomination, the length of the moratorium periods and the types of disposals that will be exempt from the provisions. There are amendments about a few other matters. We have set out our current thinking on these and other areas of detail in the discussion paper deposited in the House Library last week, and I informed noble Lords that it was there. We will be happy to expand on our thinking on these areas when we debate the relevant clauses, and we can take into account what has been said.
Lord Cameron of Dillington: The Minister has set out in detail her view of Chapter 4. I have a completely opposing view of it. I have put my name to the stand part of every single clause to set out an opposing view at this early stage before we get into the detailed amendments. Is that in order, or does the Minister want to take some detailed amendments first?
Lord Hodgson of Astley Abbotts: My Lords, I am extremely grateful to my noble friend for her explanation. She gave us quite a lot of information at a fairly rapid rate. I have been scribbling down some of the points that she made, and I found myself very sympathetic with her comments about the need for balance and the need to satisfy certain criteria. Then she turned to the question of consistency across the country and a national standard. That is where my Amendment 136 comes in. It inserts in Clause 74(5) the requirement that there should be a definition of an asset of community value. That establishes consistency across the country.
I have not participated in this Bill so far, so I should make it clear at the beginning that I support its thrust. I favour community empowerment. I think it is a good Conservative principle, and I am on the side of the little battalions. Indeed, having just chaired a task force on red tape and having seen hundreds of examples from across the country, one or two of which I may refer to later, I know how important and vibrant local community feeling is, so I very much support the localism idea. Perhaps I may take a minor swipe as I go past. It is rather extraordinary that we should, as a party or Government, appoint Sir Terry Leahy, the ex-chief executive of Tesco, as our adviser. Sir Terry Leahy has had a very distinguished career, building up Tesco nationally and internationally, but his entire career has been devoted to destroying localism. His plan, of course, is to have a Tesco store on every corner, and every butcher, baker and candlestick-maker should be wiped out. It is a slightly strange appointment, but there we are.
I agree with my noble friend that there is a balance to be struck between the community entitlement and the right to private property. This amendment, and indeed the later amendments which I shall be speaking to-probably at our next sitting of the Committee-seek to explore this balance and discover the Government's thinking.
I first need to declare at least a couple of interests. The first is that I am the senior independent director of a listed company, which is one of Britain's largest brewers and pub operators. We operate five breweries and over 2,000 pubs across the country, some of which are managed and some of which are tenanted; we are an integrated business, not a pubco. Some of what I say will therefore have a pub flavour about it, if I may use that phrase, but I think there is a good deal of read across to other assets which are of interest to the community and on which I am sure other noble Lords will wish to speak. The other interest that I ought to declare is that I am president of the National Council for Voluntary Organisations, and-before someone else points it out-the NCVO has briefed
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My concerns and my reasons for speaking to this amendment are partly philosophical and partly practical. I will deal with the philosophical point first. As my noble friend has made clear, the right to enjoy one's private property is an absolutely fundamental part of our society. The Englishman's home is his castle: it provides stability for our society; it provides people with a stake in our society and in the order of that society. If I may exaggerate grossly to make a point, development experts will say that property rights are a key part of any country developing satisfactorily. If you do not know when your property may be removed from you, why bother to invest? Merely go and stick it in Switzerland and wait for the inevitable to happen. I am not in any way suggesting that there will be wholesale expropriation. I am, however, suggesting that there may be the law of unintended consequences. It may deter people from offering their assets for use by the community, for fear of precedent; and as noble Lords will have seen in the briefings we have had, woods, cricket pitches and use of buildings are all issues that have been raised by various interest groups talking about the background to this Bill. It would surely be a shame if we were to impede much worthwhile activity at a local level.
So much for the philosophy; what practically needs to be done? My amendment suggests that we should insert a definition on what constitutes an asset of community value on the face of the Bill. This will reduce the fear of the unknown factor. What factors and issues could be included there? I think there is an argument that it should only operate for local businesses. I understand that the wish is to have farm shops, village stores, restaurants and pubs, but national chains-even Sir Terry with his store-might not be as appropriate as an asset of community value. The question is also whether there is any alternative provision in the locality; if there are two restaurants or two pubs, for example, should one of them be able to be listed? As the noble Lord, Lord Greaves, said, there needs to be some distinguishing between the service that is being offered and the premises in which it is being offered. Many communities will like having a shop, a post office, or a shop and post office combined, but suppose it is bought up by the community and turned into an antique shop; that is rather a different issue.
There are also possibly some reasons to prevent flipping; that is, the purchase and then the resale when it turns out that the commercial enterprise is not quite as easy as was expected. Again, as the noble Lord who is no longer on the Front Bench said, there are existing rights to be respected. Taking the example of tenanted pubs, the landlord will probably live above the pub and therefore will have a premises, a dwelling, which will be part of his home for himself and his family. There are TUPE and other employment issues. Finally, there is the evidence of local support and the need for a local connection. These are some of the things that should be evidence in a national standard that we are seeking to establish.
I accept that point. But if one accepts the fundamental importance of the right to enjoy one's private property, to have a variable interpretation across the country must be undesirable and unwelcome. Some may argue that local authorities are likely to arrive at broadly the same conclusions and definitions. I wish I thought that that were the case. I fear that there will be great differences and some capricious outcomes which we simply cannot foreshadow or foresee tonight.
I referred previously to my red tape task force, and shall give an example of how local authority capriciousness can develop. Charities and voluntary groups depend a great deal on street collections. Charitable collections are governed nationally but also have a degree of local authority variability. We received interesting evidence from the Sainsbury Foundation about the way in which local councils interpret the permissions for local collections. It states:
"Local councils vary widely in their procedures. Doncaster Council, for example, assesses applications within 14 days. Wolverhampton informs applicants of the outcome within 12 weeks. Most councils require applications to be made a month in advance; but North Lincolnshire requires all applications to be submitted by 30 November for collections the following year. Basingstoke has a simple one page form requiring the name of the charity and proposed dates for collections. North Lincolnshire requires the names and addresses of the charity's secretary, treasurer, auditors and bankers. Wolverhampton requires collectors to undergo a police check. Surrey Heath wants to know whether the collector is going to be accompanied by an animal".
These are the sorts of capricious outcomes that we will have. They are undesirable and a cause of confusion to charities, as seen in this narrow example, and you will have a much wider application in the concerns of this Bill. We need to avoid this sort of situation when it comes to establishing assets of community value. The definition in the Bill would be a good place to start.
Lord Cotter: My Lords, first, I thank the Minister for her comments. There is no question that I and many noble Lords engaged in the Bill, as well as those outside this Chamber, support the intention to support local communities by giving them a chance to have their say. This amendment has a particular point to make on behalf of businesses. It is designed to ensure that no private assets are put on the list. The fear is that, once a private asset is put on the list, it possibly will have an effect on the market value and thus make it more difficult to sell. That would be very discouraging and could tangibly affect not only the business people but the community as well, and have a negative impact on both the community and the owner of the business.
Local people might wish to list a very much appreciated local shop for fear that the owner might sell it on for use as flats or offices and deny the community a valuable asset. People could be overzealous perhaps in what goes on the list-I will be very interested to know what the Minister thinks of this-and will try to protect their much valued shop in this case. Of course, it can have a counterproductive effect on future businesses
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Lord Gardiner of Kimble: My Lords, I want to speak to Amendment 136ZD in my name and that of my noble friend Lord Cathcart. My noble friend the Minister is aware that I raised reservations at Second Reading about this part of the Bill and the unintended consequences affecting private owners who allow their property to be used for community use. I thank my noble friend for her explanation earlier because it starts to clarify the intentions. However, the intention of this amendment is to provide greater clarity and also thereby allay justified concerns with a definition of an asset of community value and to provide clear guidance to local authorities, which is essential if we are to avoid confusion and unnecessary legal action which could be the case if we do not get this definition right.
I also think that we should strengthen the tests which have to be met in relation to nominations for the community asset register. We should firm up and define what is intended by community value. The primary requirement in all cases should be that assets of community value must promote social well-being through their past or current use. There should also be a secondary requirement, where local authorities consider it appropriate, of furthering the economic and environmental well-being of the community.
The amendment sets out the various factors that local authorities must take into account: current use; planning policies that affect the asset, which could include planning permissions already in place; what the nominator is proposing to use the asset for; evidence of wider support for the nominator's proposals within the community; where there may be another site in the locality which could serve the same purpose. I think very much of the local library that might be closing but another publically owned property could be used for that purpose.
However, in accepting that exclusions from the listing will need to be in the regulations rather than in the Bill, the key one is that most residential premises must be excluded from listing. I say most because I can understand the asset where there is a pub where the living accommodation is secondary to the purpose. I am persuaded that village shops, post offices and pubs should be assets, which if communities wish to bid, they should be in a position to do so.
There are so many examples of private individuals enabling communities to use part of their residential premises and it is essential that the regulations make it absolutely clear that these premises are not included. I therefore hope that my noble friend the Minister will give this amendment due consideration and bring back on Report a comprehensive amendment on the definition of an asset of community value. As far as I am concerned the test will be that private owners will not in any way be advised that it would not be sensible
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Lord Moynihan: My Lords, I support Amendments 136, 136ZA and 136ZD, to which my noble friend has just spoken. In so doing I need to declare an interest as chairman of the British Olympic Association which has, among its principal objectives, the promotional of sport and recreation.
I seek guidance from my noble friend the Minister because I can see a great deal of good news for sport and recreation. Inasmuch as local authorities will have a duty to maintain a list of assets, the freedom to determine the form and content of the list, to set out specific requirements and to allow community nominations to be proposed, there is in many respects a presumption in favour of listing sport and recreation assets. I would have no problem whatever if this legislation applied exclusively to local authority or public sector facilities. Indeed, we had a lengthy debate this afternoon on Amendment 130, where my noble friend Lord Jenkin sought to insert,
In that context, I see real benefit. As I say, I have no problem whatever with supporting it. On the contrary, it would enhance sport and recreation provision if the principles within this Bill, which I support, applied to those public sector facilities. Many playing fields owned by the Government and many local authority facilities would fall into that category.
However, as I read it and as I listened to the debate, Clause 74(1) and the amendments to which I speak apply to assets of community value wherever they are found, including on private property. Many noble Lords have understandable reservations regarding pubs and local shops, for example, but the situation regarding sport and recreation facilities is, I would argue, very different. Organised competitive sport in this country over the past 200 years has its roots in the relationship between landowners and sporting activity. Many cricket grounds, for example, are still located in the grounds of homes around the country. Many equestrian or sailing events and fishing activities are to be discovered on privately-owned land. The history of British sport rests on the amicable nexus between sport and recreation, on the one hand, and the good will of the private property owners-long may that remain the case-but as currently drafted the Bill risks halting that process.
The reason is this: that relationship is based on good will, on tradition, on the work of volunteers, the love of sport and recreation and, in many cases, clubs which have been formed, nurtured and flourished on the cornerstones of local communities to this day. As I understand it, the sole purpose in this context of the list would be to create transparency, providing a legislative process for local communities to bid for listed facilities. The bid, of course, could be rejected. Apart from that benefit of greater transparency, I seek guidance from the Minister because I do not see any further benefit. On the contrary, at the moment a mutually agreed sale can be agreed between the landowner and a community
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Let me cite an example. A private landowner who has a squash court attached to his property might want to provide a local village school with the opportunity regularly to use that court, but with this legislation the person concerned is unlikely to do so. He or she will certainly be very wary of so doing. When the property is up for sale, a search initiated by a future buyer may find that squash court is now listed under this legislation. A buyer making an offer may be time-constrained and thus walk from the sale or offer a reduced price. A buyer may well walk from a sale faced by a hostile local community, with the power of the press on their side given the publicised moratorium on the sale and the provisions in the Bill. I am sure that nobody in this House, on either side, can foresee this, but nevertheless there are risks that a future Government of a different political complexion might embed the full list in new right-to-buy legislation, damaging the value of the properties, or, looked at another way, putting a new tax on today's market value of the properties. Put simply, many landowners will avoid these risks and shelve their plans to provide for sport and recreation today.
If my noble friend the Minister can allay these concerns I will rest persuaded, but on reading the Bill-I have not had the privilege that my noble friend Lord Hodgson has had of many letters or briefings on this subject; indeed, I have not had a single briefing-I am concerned that where there is good will among individual owners of properties, where, through their good will and intent, they build strong relations with their local communities, allow primary schools to access their land and use those facilities, the tennis court, swimming pool or squash court, the consequence of the Bill, which may be an unintended consequence, will be such that that individual immediately stops doing that any more for fear that listing will impact on the final value of the house. If there is a way to address that in the Bill and to recognise that nothing could be more damaging than multiplying that across the country with the negative impact that that would have on sport and recreation facilities and the negative impact that it would have on good will and local communities-which is what the Bill is all about in driving localism-I would be content to support the Bill, to move forward and to persuade my colleagues in the British Olympic Association that this is a subject that does not warrant the concern that it currently has.
Put simply, there are many landowners who I believe will avoid these risks, as I say, and shelve their plans to provide for sport and recreation. That would, frankly, be a disaster, particularly in the countryside, and I am sure that it is not the Government's intention. As a result I ask my noble friend to address himself to my three amendments and to take this clause away in order to see how sport and recreation can be fully protected, particularly those facilities I have focused on this evening which are owned in the private sector by private landowners. I emphasise that I fully support the provisions of the Bill to free up many facilities that
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Lord Jenkin of Roding: I want to make one or two points. I have been hugely impressed by what my noble friends have been saying about this. I listened with care to what my noble friend on the Front Bench said about the objectives behind these provisions and I shall want to read that very carefully in order fully to understand. I am not sure, possibly as a result of my poor hearing, that I got it all, but I will read it.
My fear is due to the fact that the whole essence of localism is supposed to be building a partnership between local authorities and local communities. It depends for its development on the good will that will be generated by this process. I have put my name to a lot of amendments, including that to which the noble Lord, Lord Cotter, spoke earlier, because it seems to me that that is essential.
We are talking about public assets. I find it quite extraordinary that this is intended to apply to a wide range of privately owned assets. Businesses, yes-the noble Lord, Lord Greaves, made the point that, if there is a business such as a post office, a pub or something else that is going out of business, it is perfectly reasonable that a community might wish to say, "We can run this. We will take it over. We cannot open for the full time, but we will be open so many hours in the week" and be able to do that. That is a voluntary and community partnership.
What I find difficult is that this is all to be imposed by central government. There must be some way in which the statute could be drafted so as to build on the idea of community partnership with local authorities rather than giving everyone the sense that this is being imposed on them from the centre. One fact tells the story: there are 54 references to specific cases where the Secretary of State can issue regulations from the centre in this part of the Bill alone. The whole thing is being imposed from the centre.
I do not want to go on singing this song because I have sung it a good deal during the passage of the Bill, but the amount of detail that the Government are seeking to impose is absurd. Why do they have to decide and lay down what is of community value? Why can a local authority not establish criteria? Guidance could be given about the sort of principles, but does that need to be included in statute? Why does the Secretary of State have to decide who can make a nomination and who cannot? This gets the whole thing off on entirely the wrong footing, and it is the wrong sort of emotional approach to what one is trying to achieve-that is, localism, local responsibility and the ability of local authorities to respond to the desires of the local community. After all, the councillors are elected by people from the local community. That is the relationship that one should be building on. As a
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I am sorry, but I get quite hot under the collar about this because it rather upsets me. I have some sympathy with the noble Lord, Lord Cameron of Dillington, who put his name to the question on whether the clause stand part, to which I have also added my name. Having considered the details of the anxieties and objections of the local authority associations-I have them all here but I will not weary the House with them-I have come to the view that we cannot go ahead with this part in the way that it is currently conceived or drafted. The whole concept behind this seems to be drawn up on the wrong principles. I hate having to differ in such a rooted way from my noble friends on the Front Bench but one really has been driven to this. I have not had anything like the representations that my noble friends have had and have spoken about but, hearing them and realising what is behind this, I beg my noble friends to think again.
Baroness Thornton: My Lords, it is time that someone stood up and said how much they welcome what the Minister had to say and how much they agree, although it may not help her for me to say so from these Benches. On what the noble Lord, Lord Moynihan, said about Governments of a different complexion, I say to him that in my view my own Government were really rather timid on this matter.
Why does the community right to buy matter? There are thousands of community organisations in this country that need the right to buy. This is not about central government imposing something on the local community; it is about giving a right to buy. I shall take a moment to explain. Healthy, viable communities are in the interests of landowners and everyone else. The community right to buy in the Bill is a significant step towards realising the aspirations of localism, the big society, the good society and community regeneration-aspirations that to a high degree are shared across the political spectrum. It would be a bitter blow for hundreds of communities if these actually quite modest proposals were derailed in this House.
Earl Cathcart: My Lords, just for clarity, I point out that the noble Baroness referred to a "community right to buy", whereas the Bill is actually about the right to bid. Did the noble Baroness mean "right to bid" rather than "right to buy"?
As the noble Baroness said, it is not about forcing a sale, or forcing landowners to sell to a particular bidder; it is about creating even more use of assets, some of which were previously liabilities. In the past, disused buildings, wasteland, schools, libraries, town halls and offices which were becoming redundant have all been used by local communities. The Bill promotes an extension of that activity. For example, in London the Westway Development Trust took over 40 acres of
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This is an important and practical step. The Government have sought to build safeguards into the Bill, to protect owners' interests. It would be a great shame if we were to lose what would be a relatively modest step towards giving communities the right to make use of assets which they very much need.
Lord Flight: My Lords, as I understand it, what this is about, as the noble Baroness has just described, is the concept of a period of pause. It has not yet been specifically defined, but if the shop or the pub closes, the community might have a period of six months, during which to get the money together to buy it. During such a period the owner would be constrained from selling it.
In itself, that sounds not unreasonable. I am somewhat concerned at the length and complexity of legislation that that rather simple idea has given birth to. When I sit back and think about it, the issue of price is absolutely fundamental. As was just pointed out by the noble Earl, Lord Cathcart, this is a right to bid, not to buy. However, if the owner of the property does not wish to sell, or believes that he can sell at a much higher price, then clearly he is not going to sell, and so the right to bid is not going to do the community much good. Equally, if it turns into a right to buy, there is still the question: what is the price? Who is going to determine the price? Will there be some premium in the price? I am a little concerned that these very complex arrangements-the central objective might more easily be achieved simply by defining a time period in which community groups have grace to assemble the money-as they are presently structured may be self-defeating in a situation in which the owner is not willing to sell. To say that price should be left to market-well, what is market, when something has been listed? I am not sure that the provisions of the Bill can achieve their objectives without thinking about price.
The Earl of Lytton: My Lords, I need to declare my interest which I have not previously declared-there has been no need to do so until this part of the Bill-as a landowner and a practising chartered surveyor as well as my interest in local councils.
I need to bring a technical aspect to bear here. However, before I do so, I should like to comment on something said by the noble Baroness, Lady Hanham, in her introductory remarks. The provisions of the Bill go well beyond what might be described as the recovery of assets that were in, but have passed out of, community use. As regards some of the things about which the noble Lord, Lord Cameron of Dillington, is concerned, a much wider aspect seems to be appearing.
In my professional life I have prepared lots of lists of property assets. I worked for nearly seven years in the public sector and during that time dealt with a lot of things for local authorities, health trusts and government departments, so I know something about preparing lists. I suggest that the proposed list is very far from being a free bet. The process would involve drawing up, managing, publishing, and possibly providing free of charge, a list of indeterminate size and complexity. Why is that the case? It is because regulation cannot foretell what propositions will come forward as a result of the Bill's provisions.
The obligation is subject to what the Secretary of State may decide following consultation. It is perhaps a pity that the Government have not yet published their response to the results of the consultation on their paper entitled, Proposals to Introduce a Community Right to Buy-Assets of Community Value. In due deference to the noble Baroness on the opposition Benches, the right to buy was not a term that she coined, it was in the consultation document, as I perceive it. I look forward to that response informing the Report stage of the Bill. I hope that I will receive a reassurance from the Minister that it will be forthcoming before that stage so that we all have time to consider it.
I go back to the list. There will be rules about content, additions, deletions and modifications. The list will have to delve into issues of ownership, some of them quite detailed and probably some that are commercially sensitive and may even be confidential. The list will have to be maintained alongside another "not in" list of failed nominations. All I would say at this juncture is that even on a conservative basis this will be a resource-hungry exercise for local authorities.
Lord Brooke of Sutton Mandeville: My Lords, like my noble friend Lord Hodgson, this is my maiden speech on the Bill. I intend it to be generic rather than go into detail and I hope, therefore, to be brief. I regret the hour at which we are holding this debate, although my noble friend the Minister showed admirable initiative in opening it with the statement that she did. It is a pity that the noble Lord, Lord Cameron of Dillington, did not have the opportunity to paint the larger landscape before we started getting into the detail.
I am speaking in particular to Amendment 136ZD, in the names of my noble friends Lord Gardiner of Kimble and Lord Cathcart, to which the former spoke a little while ago. I express my admiration for their exercise in clarification. The instincts that underlie generosity to one's community are the big society writ early. I was a London inner-city Member of Parliament for nearly a quarter of a century, and London is nothing if it is not a collection of villages where the instincts of the big society apply. I have in a recent debate identified in my own constituency Pimlico and Soho as model inner-city communities, if in different modes. I have, however, had an address in Wiltshire for half my life and these characteristics of the big society or, as Burke might put it, the small platoon society, are perhaps evidenced even more vividly in the countryside because of the way everyone knows everyone else and where the roots of families are at least as deep as those of parallel families in the cities, if not more so.
I pay warm tribute to those who give of their substance in rural areas and demonstrate their recognition of local need and to the imaginativeness of their responses. My one plea to my noble friend the Minister is that that generosity of spirit should not be unduly curtailed by the letter of the law, which can turn the landscape into briars and brambles which deter rather than welcome sensible development. I, in turn, have welcomed the amendment as being an insurance policy to support one's desire to be helpful to the community rather than to ring one's assets around with defences against hazard.
I end with the amendment of my noble friend Lord Hodgson and support his Amendment 136, though by placing it in line 19 of page 61, it means it offers late rather than early assistance in illuminating the first four lines of that page. It is the opposite of the example once set by a Polish Bishop who was visiting a parish in his diocese, an episode that could be helpful to many a parliamentarian. When greeted by the curate, the Bishop said, "When I visit parishes in my diocese, I am accustomed to be greeted by the sound of bells, and that has not happened today". The curate said, "My lord, there are three reasons. The first is there are no bells". "Pray go no further," said the Bishop. Although my noble friend Lord Hodgson has placed his amendment quite far down on page 61, I still think it is an extremely valuable contribution to the Bill.
Baroness Byford: My Lords, I have waited very patiently because my name is not added to any of those amendments, but I support the amendments tabled by my noble friends. I will pick up on what the Minister said to us earlier. In some ways it was a shame that my noble friend Lord Cameron was not allowed to express his broader concerns on the whole of this section. My noble friend quite rightly said that the Government have it in mind to introduce a right of appeal, so clearly they recognise that the Bill, as currently laid down, is far from satisfactory, and that we will get a compensation scheme later. My question to the Minister is: how soon will we have sight of what a compensation scheme might be, or when will we know what right of appeal will be formally moved hopefully between now and Report?
I have a farm in Suffolk that is listed in my interests here, but in this particular context I have no interests that are particularly relevant to this. However, I was formerly one of the patrons of ViRSA, which the noble Lady, Baroness Thornton will recognise. We dealt for many years with post offices being squeezed and unable to make a living in support of their long-term well-being-we are talking here of sub-postmasters and sub-postmistresses. In his amendment, the noble Lord, Lord Cotter, clarified quite well the difficulties that we face with this Bill. Are we talking about the loss of a facility that is established within one's own community, or are we in fact looking at a facility, such as a post office, that is also someone's dwelling place? Those are two very different issues, and my noble friend, when she comes to wind up, might perhaps enlarge upon that because it is crucial that we know exactly where we stand. For example, in some areas that I know, post offices that have been under threat have managed to relocate into shops, churches, or
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My noble friends also expressed concern about land, and to a certain extent about personal privacy, and about investigations that could be made under the proposals in this section of the Bill that would also worry me. We know only too well of investigations of things that are held on computer disks and things that get moved around. Some of this might not be well held in the public domain, to be honest. This is the balance that we have to get right in the Bill. I support the Bill. As I said earlier on, I am a great believer in localism in its truest sense and from the lowest level. Noble Lords who have not heard me say before will hear me say now that, at the parish level, whether in cities or in country areas, localism is most important.
To pick up on a point made earlier, within local councils, authorities or parishes, there will be different interpretations of how they want to proceed. Again, I would be glad if the Minister could reflect on that in her response.
Lastly, I am concerned-not from my point of view, because we have no interest in it-that that could well have an effect on the land value or the land market of people's private, individual holdings. I hope that the Government will reflect on that.
As I said at the beginning, I am very grateful to my noble friend Lady Hanham for her statement on inheritance and gifts between families and trusts and considering the question of the holding for a limited time if those assets are bid for. I cannot see any reason why you would bid if you are not going to buy. There is no logic.
I, too, am sorry that we are discussing this very important part of the Bill at this time of night, but we are. I am grateful to all noble Lords who have spoken and seek clarification from the Minister on many of the points made, which I fear will make us rather late finishing tonight. I thank my noble friends for proposing their amendments, which I support.
Lord Cameron of Dillington: My Lords, I have had a note from the government Front Bench saying, "Do say what you wanted to say", but I believe that it is far too late at this time of night for me to say what I wanted to say. Like all good bedtime stories, as in The Arabian Nights, I will leave the next episode until we meet again.
Earl Cathcart: My Lords, obviously, I support Amendment 136ZD, ably proposed and argued for by my noble friend Lord Gardiner, to which I added my
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Some months ago-it may have been many months ago-I recall the Prime Minister saying that he would bring forward measures for communities to save their village shop, pub and post office. That is an admirable idea, and here we have Chapter 4 before us, but now we have a huge expansion of the assets that communities can save to include all assets from which members of the community derive some benefit. That has put the cat among the pigeons for those landowners and others who allow their communities to enjoy the open spaces of their farms in one way or another. As other noble Lords have said, the unintended consequence of the way that the Bill is written is that landowners will withdraw permission for any activity on their land, a point powerfully put by my noble friend Lord Moynihan. That would be disastrous. If it were to happen, it would go against the grain of the big society, which is what the Bill is meant to be all about.
I am afraid that I do not share the view of my noble friend Lord Jenkin. I am slightly nervous of leaving it to a local authority to say what it thinks an asset of community value is. What if the local authority is signed up to the idea that all assets should be to the benefit of communities? That would be very dangerous for landlords and I do not think that I could support that.
In this area, I was having a similar thought about tabling an amendment that would try to take the matter back to business assets rather than all assets. My idea was to provide that "a building or other land may be of community value if it is used on a commercial basis by the local community". That is very much in the same vein as the first amendment in the group-Amendment 133D-on business assets.
I should declare an interest that I own an asset of community value-a woodland in Kent. I would be happy to go along with the Bill's provisions but that is for me. It is my decision and my feeling about my relationship with the community. Any suggestion that assets of community value are restricted to assets that are already in community use when it comes to land is extremely dangerous. It produces exactly the side-effects
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There is no great function for this part of the Bill when it comes to rural communities anyway. Under the neighbourhood planning provisions rural communities with a lot of land and space to spare, and therefore an ability to develop, will be in a very strong position to do deals to support the businesses that they want to support and mould communities in their own ways. They are the great winners from neighbourhood planning. I suspect that suburban communities with decent amounts of space will do equally well. I am concerned about the example that was adduced about the problems that arise in cities where neighbourhood planning has very little to offer. Such communities by and large will not have the ability to tackle these things proactively, to accumulate wealth to be able to support or buy assets as and when they are wanted and to think ahead in the way in which it will happen in rural communities. I do not have an answer to the question posed by the noble Baroness, Lady Thornton, about what happens in cities, but for rural communities this part of the Bill is entirely unnecessary, as neighbourhood planning will do it all.
Lord Patel of Bradford: My Lords, I will be very brief as the noble Baroness, Lady Byford, covered many of the points succinctly. First, I thank the Minister for her intervention earlier. It was very helpful, but I think that we need to study the note in the Library. I have a feeling that this will be an iterative process. We would certainly welcome involvement in that and further meetings.
Notwithstanding the benefits that my noble friend Lady Thornton pointed out in respect of this clause to local communities and local areas, we recognise the good intentions and the thrust behind many of the amendments and the arguments that have been presented, together with carefully crafted amendments. We obviously need to look carefully at the practicalities of what this means. I can say certainly that the point made by the noble Lord, Lord Moynihan, struck a chord. It is clearly an issue that we need to take further and seek more clarification from the Government.
We agree with the comments made by the noble Lord, Lord Jenkin, in respect of the centralised delegated powers. We are completely on board with that. That issue has kept coming up throughout all the debates and needs to be looked at very carefully. As I say, I think this is going to be an iterative process. The amendments pose some very serious questions that we need to explore further, and I look forward to what the Minister has to say about that. We will certainly want to sit round the table with the Minister and others and look at this a bit more carefully.
Baroness Hanham: My Lords, this has been a longer debate than we would have hoped for at this time of night. I fully accept that this is not ideal but that is how the business has gone. We could not have stopped at 9.30 pm. I kept hoping that somebody would manage to keep the debate on the previous amendments going long enough for us to stop, but that has not been
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I want to say from the outset that we are looking at this all the time. I hear what has been said and where I cannot answer questions put forward by noble Lords satisfactorily, we will clearly need to make sure that by the next stage we have had the sort of discussions the noble Lord, Lord Patel, is talking about. Indeed, we have already had considerable discussions on the points made. The fact that they have come up again probably means that we have not satisfied noble Lords and we will have to try and do that and look at making revisions to the Bill before the next stages.
In my opening remarks I tried to bring this back from being a very wide problem into being quite a simple, singular matter. The purpose behind these provisions is to try and ensure that, when a valuable asset in a local community comes up for sale, the local community has a window of opportunity to see if it can get the money together to buy it. I know this is happening all over the place. There are lots of examples already of people buying their local pubs or shops to keep them from going out of business.
There are also plenty of examples of people saying, "If only we had had a bit of time, we could perhaps have done something to preserve this and protect it for our local community", and that is what we are offering here. It is not going to be a very long time; it is just going to be a short time for people to say, "That is a valuable asset. We have already said that we like it. If it comes up for sale, we want the opportunity to see whether we can, as a community, get the money together". What the Bill does not do is say that they can buy that facility if they cannot afford it at the price that the seller is asking. During the time that the community is putting the money together, there is nothing to stop the person selling from going through all the negotiations and discussions that they want. At the end of the day, the seller may be perfectly happy to sell whatever it is to the community, and they can do that. There is nothing in the provisions that says that they cannot sell to the community at an early stage if they want to. All we say is that there is a window of opportunity for the community to find out whether they can do something.
Most noble Lords have not seen that as being unreasonable, but there is a certain feeling of pressure and compulsion about this which really is not there. The only compulsion, if I can put it that way, is the fact that the asset has to be notified in advance as being something in which the local community is interested. That is where a list comes in.
In a village, I do not know how many pubs people can claim to have an interest in. I am not sure how many assets there will be in a town centre in which people can have an interest, but probably not a lot. I do not think we are talking about a multitude of areas on which people will want to put their finger and say, "If you are going to sell it, this is an asset that we want". Public assets can also be listed. If a local authority decides to sell a sports ground, for example, that is an area where this provision would intervene, so that it could have an opportunity to see whether it could buy it.
I shall read very carefully what has been said and I shall make sure that my colleagues do too. We have to be able to answer more clearly than I can tonight the concerns that are being raised. I cannot say that they are not justified because I cannot narrow it down sufficiently at this stage to say categorically that this will be the situation. As regards the fears expressed by noble Lords about land assets being devalued because part of the land will have been identified as an asset, a compensation scheme will come into effect. On the point about something on a list coming up in a land search, presumably someone will say it is there anyway, but I do not know whether that will devalue it. I do not see why it should just because someone is trying to get some money together. It might delay the sale, but there will be compensation if that happens.
The fact that my noble friend Lord Moynihan spoke about the loss of sports and recreation facilities if this goes ahead, and that other noble Lords commented on the fact that landowners will be advised not to let their land be used for any community facility, is something of which we need to take cognizance. If that is what is being said, and if that is a fear, that will stretch out further as we go through the Bill. We need to take note of that and I can assure noble Lords that we will discuss it and come back on that.
I will go through the amendments. Some people will be quite happy with what I am saying and others will not be. Going through the brief on the amendments will pick up some of the points that have been raised and may explain matters better than I can at this time of night.
We do not think that Amendment 136, tabled by my noble friend Lord Hodgson, is necessary. Clause 75(1) and (2) say that there will be an indication under regulations of what will be involved. We will try to see that there is reasonable coherence about that so that when we come to the next stage it is understood as well as it can be. It will involve buildings such as pubs and local community facilities. I am not sure how much wider it will go, but we will ensure that it is well understood. I recognise that there has been pressure from noble Lords for greater certainty, including over definitions. We are very grateful to noble Lords who have raised this matter. My noble friends Lord Gardiner and Lord Cathcart raised the issue in connection with Amendment 136ZD.
Amendment 136ZD also combines a primary requirement that assets of community value have been or are promoting social well-being with a number of factors that local authorities must take into account as secondary considerations in arriving at final decisions on listing. These include relevant planning policies, the use that the nominator is proposing for the asset, evidence of community support for the nomination and the availability of other assets locally that could serve the same purpose. As I said, we will give this careful consideration and consult more on it. In doing so, we will have in mind the recommendation of the Delegated Powers and Regulatory Reform Committee that any regulations under Clause 75 should be subject to the affirmative procedure.
There has been a lot of criticism about the number of regulations laid out in the Bill. One reason is that
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Amendment 136ZBA proposes an ingenious way of addressing concerns that have been expressed on behalf of landowners who make land or buildings available for community use. This point was made very clearly by my noble friends Lord Moynihan and Lord Gardiner. We have had a lot of discussion about this outside the House. I will take the example of a corner of an agricultural field used for the cricket club or disused clay pits to which people have access for walking. The suggestions in Amendment 136ZBA are interesting and we will give them further consideration.
We have some sympathy also with the intention behind Amendment 136ZAB, tabled by the noble Lords, Lord Greaves and Lord Tope. Since the provisions are breaking new ground, we will need to learn from experience how they work. However, we will need to give further consideration to those as well.
Amendment 136ZAC would limit the power to decide whether an asset meets the definition to a local authority and no other body. The present thinking is that it will be only the local authority, as defined in Clause 91, which can exercise that power as the democratic authority. My noble friend Lord Jenkin asked why this was being laid down from the centre and why local authorities could not make up their own minds about who will be able to nominate an asset, what the asset will be and whether it will go on the list. The centre is laying down only the ground rules for this. It would be impossible to leave it to local authorities to decide what an asset is without giving them guidance as to what an asset of community value might be, and whether there are limitations about which they need to know. Of course it will be up to local authorities to decide whether a community that is looking at something will be able to deliver or whether it is just putting forward a sighting shot. They will be in charge of making sure that the community is not simply using a delaying tactic but putting forward something that has a reasonable expectation of being successful.
I made it clear in my opening statement that it is our intention through regulations to exclude types of land such as residential premises from the listing-that point was made by my noble friend Lord Moynihan-unless, for example, they are integral to a pub or shop. If you have a pub with residential accommodation attached to it, you will not just be able to list the pub if it also has residential accommodation that is being used. We cannot support the remaining exclusions.
Amendment 133D fundamentally misconstrues the purpose of the provision by proposing to replace land and buildings with businesses. It is wider than that. It will not just be confined to businesses as such, but we need to talk about how much wider it is going to go. It would be entirely inconsistent with the rest of the chapter and would effectively exclude most public assets from these provisions, since they would not be considered to be businesses, although they are crucial to the aims of the policy.
On the other hand, Amendment 136ZA would limit land of community value to publicly owned land, or land that a private owner agreed is of community
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Amendments 136ZB and 136ZC make a different point. They seem to propose excluding land for which public access is already guaranteed under statute, or which is very unlikely to be put on sale but which is self-evidently of community value. In both cases, while listing would be unlikely to lead to any further action, there is no reason, we believe, for not allowing such land to be listed to provide for the unlikely event that it does come up for disposal.
We have another series of amendments, all based on the same theme that local authorities should be allowed to operate the scheme as they wish within some very broad parameters set out in the Bill. It is a question of balance. As I have said, we will be considering that further.
I am conscious of the many questions raised by noble Lords, not all of which I have answered either in my opening remarks, in my response to the amendments or by what I have said. However, I hope that I have covered enough of them to make noble Lords realise that my ears are wide open to this. We appreciate that this is a controversial area of the Bill, but we have been having discussions and will continue to do so to see that we end up not with unintended consequences in this Bill but with what we believe would be a valuable asset, which is to be able to ensure that local communities have an opportunity, if it arose, to take over buildings of community value if they can afford to do so.
Lord Greaves: My Lords, I have lots of things to say about everything in this group, but I am not going to because I might get lynched if I tried. It is a while since anybody was lynched in this building and I do not want to be the next.
First of all, I thank the Minster for the very detailed care with which she has taken the debate on these amendments, even at this time of night. It has been extremely helpful. A lot of useful stuff will be recorded in Hansard, and I think it will help us very much in what is clearly going to be quite a lot of further debate on the rest of the groupings on this part of the Bill.
I just want to comment on Amendment 136ZBA. I did not comment on it when I originally opened the group because I discovered that I had a slightly out-of-date list of groupings and it was not on it, which caused me confusion. The Minister referred to this amendment and said the Government were looking at it sympathetically. The proposed amendment would exclude land and buildings that have an ancillary use of community value but where it is not the main use. This is a fairly well known concept in planning. I am not sure that it is exactly transferable but, where there is a sporting use or another public use that is ancillary, minor or part-time, it clearly has to be excluded. I believe that that would go a long way to solve the problems that were eloquently explained by the noble Lord, Lord Moynihan. I was very pleased indeed that the Minister said that the Government were looking at the concept raised in my Amendment 136ZBA.
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