Government Amendments and Response: Public Bodies Bill [HL] - Delegated Powers and Regulatory Reform Committee Contents


Sixth Report


Public Bodies Bill [HL] - Government Amendments

1.  In our earlier report the Committee raised serious concerns about this Bill as it was introduced. For the reasons set out in this report, the amendments so far brought forward by the Government have not resolved these concerns.

2.  The procedural changes relating to consultation and a form of the super-affirmative procedure are welcome as a step in the right direction. Subject to further consideration of the important points we raise in paragraphs 24 and 25 below, the amendments do seek to address the Committee's concern in our earlier report on the Bill about inadequate parliamentary scrutiny of orders.

3.  However, as the Committee has made clear in the past, the insertion of a super-affirmative procedure cannot by itself bring a misconceived delegated power within the bounds of acceptability.[1] The House would have only a single Parliamentary consultation stage before an order was brought forward for approval; and the government, not Parliament, would retain the ability to make amendments to orders. Therefore, while the amendments go some way towards addressing the Committee's procedure / scrutiny concerns, they do not resolve the fundamental problem that the powers themselves are not currently appropriate delegations of legislative power.

4.  In this report and in our previous report on the Bill the Committee has drawn attention to the exceptionally broad nature of the powers proposed to be delegated to Ministers under clauses 1 to 5, 11, 13 and 18, and the Bill has not been amended effectively to specify or limit the purposes for which the powers in these clauses may be exercised. The Government amendments to clause 8 impact upon clauses 1 to 6, but in a restricted way (as explained in paragraphs 11, 12 and 22 below). The Bill therefore remains a skeleton Bill, despite the enhanced procedural requirements. This is particularly stark in the case of the proposed power in clause 11, where it is proposed that the power should entitle the Minister to add any of the 150 bodies or offices listed in Schedule 7 to any of Schedules 1 to 6, but where there is no current intention to make changes to the status of any of those 150 bodies or offices. Despite the Committee's strong criticisms of clause 11 and Schedule 7 in its first report on the Bill, the Minister makes no attempt in his letter to justify those provisions. If the House can find no over-riding reason or exceptional circumstances which justify the inclusion of clause 11 and Schedule 7, the Committee recommends that they should be removed from the Bill.

5.  Such a change might also have the effect of making it easier for the powers in clauses 1 to 5 of the Bill to be better calibrated to matters which are appropriate to be left to delegated powers.

Background

6.  At its meeting on 10 November the Committee considered and reported on the Public Bodies Bill (Fifth report, HL Paper 57). The Committee repeats that it takes no view on the proposals to restructure public bodies, which as a policy matter are for the House to consider. The Committee's remit is restricted to the proper use of, and Parliamentary control over, delegated powers.

7.  The Committee found that the Bill is almost wholly enabling, granting to Ministers enormous discretion to use delegated powers to abolish or restructure a large number of public bodies and offices, transfer some or all of their functions to other bodies, and to abolish or alter the functions of the bodies, including conferring new functions. The Committee had particularly serious concerns about the powers in clauses 1 to 5 and clause 11 (with similar concerns about similar powers in clauses 13 and 18). These powers, and the Committee's concerns, are explained in our earlier report on the Bill.

8.  In this earlier report the Committee concluded "that the powers contained in clauses 1 to 5 and 11 as they are currently drafted are not appropriate delegations of legislative power. They would grant to Ministers unacceptable discretion to rewrite the statute book, with inadequate parliamentary scrutiny of, and control over, the process" (paragraph 1). The Committee welcomed the Minister's commitment to table amendments to meet the serious concerns expressed about the Bill during the Bill's second reading (which had attracted 54 speakers), noting: "there is general agreement that the Bill requires amendment. The precise nature of these amendments will have an important effect on the view that the Committee takes of the extensive package of powers in the Bill as a whole, and the Committee will examine them carefully when they are available. We express the hope that this will be in good time for the start of the Committee stage given the potential impact on the overall shape and nature of the Bill" (paragraph 34).

9.  In the event the amendments were tabled on Thursday 18 November, and published on Friday 19 November. This meant that the Committee could not meet to consider them until Monday 22 November. The Committee has also received a letter from the Minister, dated 19 November, which addresses the Committee's original report on the Bill and explains the Government amendments. This letter is printed in Appendix 2.

The Government amendments

10.  In summary, the effect of the Government amendments is:

  •   to add to the matters to which a Minister must have regard before making an order under clauses 1 to 6 or 18; and to provide that the independence of the judiciary is a necessary protection for the purposes of what a Minister must consider before making an order under clauses 1 to 6;
  •   to introduce consultation requirements before orders under clauses 1 to 6, 11, 17 or 18 may be made; and to introduce revised Parliamentary procedural requirements for orders under clauses 1 to 6, 11 and 18.

Matters for the Minister to consider or have regard to

11.  Amendment 108 [2] would require the Minister to consider the extent to which functions affected by the order need to be exercised independently of Ministers because they require impartial judgement etc. or involve establishing facts in relation to, or oversight or scrutiny of, Ministers' actions. But it remains the case that the Minister need only "have regard to" the objective of securing appropriate accountability to Ministers: the Minister remains entitled to consider the need for independence to be outweighed by other factors.

12.  Amendment 112 would provide that the "necessary protection" referred to in clause 8(2) includes the independence of the judiciary. In effect, the Minister, as a result of the amendment, would not be able to make an order unless he believed that the order did not remove judicial independence. However, it remains the view of the Minister that is decisive, and the provision is of no relevance to the large number of non-judicial bodies listed in the Bill.

New procedural requirements

13.  Amendment 114 would require consultation, before an order under any of clauses 1 to 6, with those specified in the amendment, including the body or holder of the office to which the proposed order relates.

14.  Amendment 118 sets out a procedure for orders under clauses 1 to 6, which appears to be based (with some significant differences) on the procedures under the Legislative and Regulatory Reform Act 2006 ("the 2006 Act").[3] The procedure is summarised in Figure 1.

15.  If the Minister wishes to proceed (under step (f) in Figure 1) with the order unamended, he need not provide any statement about the representations made. This does not follow the 2006 Act.

16.  Amendments 127 and 130 would insert two new clauses which would provide for consultation and procedural requirements for orders under clause 11 which are broadly equivalent to those for orders under clauses 1 to 6 proposed by amendments 114 and 118. But it would seem that under the proposed procedure for clause 11 a Minister wishing to amend the draft order in the light of representations, etc. made in the 60-day period must start all over again with a fresh explanatory document, and fresh 30, 40 and 60 day periods, etc. (i.e. there is no equivalent to step (f) in Figure 1). This therefore seems to give less incentive to the Minister to change his order in the light of representations or a committee's recommendations (e.g. if the order relates to a number of bodies and a committee recommends removal of one of them).
Figure 1: Proposed procedure for orders under clauses 1 to 6

(a)  The Minister lays a draft order with an explanatory document, at least 12 weeks after the start of the consultation period. (Since the Minister must consider the responses to the consultation, this does not guarantee a 12-week minimum consultation period.)

(b)  The explanatory document gives reasons for the order; explains why the Minister considers that no necessary protection is removed and that the exercise of the rights/freedoms referred to in clause 8(2)(b) is not prevented; and contains a summary of the results of the consultation.

(c)  The draft order waits for 30 days, during which period either House may require (by a resolution of the House) that subsections (6) to (9) shall apply.

(d)  If neither House requires those subsections to apply, the order waits for another 10 days but then can proceed as an ordinary draft affirmative.

(e)  If either House, within the 30 days, does require those subsections to apply, then the order waits for another 30 days after the initial 30 days. The Minister must have regard to any representations, any resolution of either House, and any recommendations of a committee of either House charged with reporting on the draft order, which are made over the whole 60 day period.

(f)  The draft order may then proceed as an ordinary draft affirmative even if Committee recommendations (or resolutions of either House) have been made but the Minister wishes the Order to proceed unaltered; OR the Minister may change the draft and lay a fresh one (with a statement of the changes) and that draft then proceeds as an ordinary draft affirmative.

17.  Subsection (2) of the new clause "Consultation on orders under section 11" makes it clear that consultation on an order to add a body to one of Schedules 1 to 6 can take place concurrently with consultation on the order under clauses 1 to 6 which would relate to the body if added. So a "one bite at the cherry approach" for bodies listed in Schedule 7 is clearly envisaged as a possibility. (This is confirmed in the letter from the Minister.)

Amendments 167, 169 and 174

18.  Amendment 167 would make to clause 18 an equivalent change to that which amendment 108 would make in relation to clauses 1 to 6; and amendments 169 and 174 make similar provision for orders under clauses 17 and 18 as is proposed for orders under clauses 1 to 6.

Analysis

19.  The breadth of the powers in the Bill, and the introduction by these amendments of a form of super-affirmative procedure, invites further comparison with the 2006 Act.

20.  Section 2 of the 2006 Act is especially relevant, as it is a power specifically aimed at the functions of public bodies. (It should be noted that the power in Section 1 of the 2006 Act is a very broad power, but its purpose is the removal or reduction of burdens and so section 2 is considered to provide a more relevant comparison.)

21.  The powers in sections 1 and 2 of the 2006 Act are subject to more preconditions than the powers in this Bill (they are that the effect of the Order is proportionate to the policy objective; that it strikes a fair balance; and that it is not constitutionally significant).

22.  The Minister explains in his letter that where the Bill differs from the 2006 Act it is because the powers under this Bill are more narrow: "The powers under the 2006 Act apply at large, whereas the powers under the Bill can only be exercised in relation to the bodies specified in it". It is true that the powers in the Bill can apply only to the 200+ bodies listed in it. But section 2 of the 2006 Act seems to the Committee narrower in at least two respects than the powers in the Bill. First, it limits the extent of Ministerial powers by specifying that the power may only be exercised with a particular purpose in mind: to secure that regulatory functions are exercised so as to comply with the principles of transparency, accountability, proportionality and consistency (section 2(3)). The key powers in this Bill do not specify any purpose for which the powers may be exercised. Certain matters are set out in clause 8 and amendments 108, 111 and 112, but these are simply matters to which the Minister must have regard, or give consideration to, before bringing forward an Order.

23.  Secondly, the power in section 2 of the 2006 Act cannot be used to abolish any regulatory function or confer any new regulatory function (though it can be used to create or abolish bodies and to make changes to their constitution and the way in which they exercise their functions). Clauses 1, 2 and 5 of the present Bill contain no such limitation, indeed they expressly provide for the abolition and creation of regulatory, or any other, functions.

24.  There are also more effective statutory requirements for Parliamentary scrutiny for orders under the 2006 Act. In particular:

(a)  the requirement to have regard to representations, resolutions and recommendations during a 60-day period is triggered merely by a recommendation of a committee of either House (unless rejected by the House), and does not require a resolution of the House;

(b)  if a committee of either House recommends that no further proceedings be taken on a draft order, then any further proceedings are automatically stopped unless and until the recommendation is rejected by that House itself (commonly called the "veto");

(c)  a Minister wishing to proceed with an order unaltered after having been required to have regard to representations must lay a statement before Parliament giving details of any representations received.

25.  There is also the practical limitation that the procedure under the 2006 Act is not used for highly controversial matters (as noted in paragraph 42 of the Committee's earlier report) which is given legal teeth by the committee's "veto" ((b) above). Careful consideration would have to be given as to whether and how a super-affirmative procedure can provide effective scrutiny of orders under this Bill, which could be very different in character to orders under the 2006 Act, and to the appropriate place for committee scrutiny of such orders.

26.  The matters to be considered in clause 8, and therefore the changes made by amendments 108, 111 and 112, do not affect orders under clause 11. There is no current policy intent by the Government to make any changes to the bodies listed in Schedule 7, so no indication of what if anything will happen to them should Parliament agree to grant the power in Clause 11 to enable the transfer of any of these bodies to any of Schedules 1 to 6 for abolition, merger, restructuring, etc.




1   4th Report of Session 2009-10, HL Paper 41, report on proposed amendments to clause 17 of the Digital Economy Bill.  Back

2   References to amendment numbers are to the numbers used on the marshalled list printed as HL Bill 25-I. Back

3   Amongst other things the 2006 Act includes powers to remove or reduce burdens and to promote regulatory principles. Back


 
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