20 Nov 2012 : Column GC145

20 Nov 2012 : Column GC145

Grand Committee

Tuesday, 20 November 2012.

Arrangement of Business

Announcement

3.30 pm

The Deputy Chairman of Committees (Viscount Ullswater): My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.

Contracting Out (Local Authorities Social Services Functions) (England) (Amendment) Order 2012

Considered in Grand Committee

3.30 pm

Moved By Earl Howe

That the Grand Committee do report to the House that it has considered the Contracting Out (Local Authorities Social Services Functions) (England) (Amendment) Order 2012.

Relevant document: 8th Report from the Joint Committee on Statutory Instruments.

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, in 2011 an order was passed by noble Lords under the Deregulation and Contracting Out Act 1994 to allow local authorities taking part in two pilot schemes to contract out to outside organisations certain adult social service functions. The order under discussion today amends the original order to allow local authorities to continue this contracting out activity in respect of the pilot programmes beyond the period provided by the original order. The pilots are, first, adult social work practices pilots and, secondly, Right to Control pilots.

The social work practice pilots are testing various models of social worker-led organisations undertaking adult social care functions for which local authorities are currently statutorily responsible. The Right to Control pilots are testing the rights of disabled people to manage some of the state support they receive to live their daily lives. As these are established pilots, I will briefly outline each pilot programme before describing the rationale behind the extensions.

The social work practice pilots were announced in 2010 and the programme has been running for more than a year. The scheme has seen the creation of seven social worker-led organisations that discharge the functions of the local authority in providing adult social care services. On a day-to-day basis, the pilots are independent of the local authority but work closely with it and in partnership with other providers. The local authority pays for the services but maintains its strategic and corporate responsibilities through its contract with the social work practices. We are looking at the pilot sites to test the potential benefits of the social work practices, and whether the innovative approaches improve outcomes and experiences for the people who use them.

20 Nov 2012 : Column GC146

The programme aims to bring people who need health and care support closer to those who provide the services they need by reducing bureaucracy, encouraging innovation and increasing the personalisation of services. The Department of Health has provided funding of £1.1 million to help the pilots get up and running and to provide initial support. The pilots are an opportunity to test different models to see what works well. They will be fully evaluated throughout the pilot period, with the final report planned for winter 2013. In considering the need to extend the pilots we listened to the advice of the social work practice working group, which incorporates the sites themselves, and representatives from ADASS, SCIE, the Department of Health and the independent evaluators.

There are two main reasons why we seek an extension to the social work practice pilots from their planned end in summer 2013 to 31 March 2014. First, it has taken longer than we anticipated for many of the sites to become established and begin providing services. This point was highlighted in the recent interim report on the pilots published by SCIE. The proposed extension will ensure that the pilot sites have an increased opportunity to feed into the independent evaluation planned to report in winter 2013.

Secondly, my department must own up to the fact that, in planning the scheme, it did not take into consideration that there would be a gap between the pilots ending and the evaluation reporting. Therefore, extending the pilots to 31 March 2014 will ensure that no pilots will need to end before the evaluation has reported, and that users will continue to be able to access the service. The local authority in each pilot area will have the final say on whether sites are extended. This order creates the opportunity to do so.

The Right to Control, introduced by the previous Government in the Welfare Reform Act 2009 and launched in 2010, gives disabled adults greater choice and control over certain state support they receive to meet their individual needs and ambitions. Disabled adults in the pilot areas are able to combine the support they receive from six different funding sources and then decide how best to spend this to meet their needs. The pilot is due to end in December this year and my honourable friend the Minister for Disabled People intends to extend the pilots by a further 12 months to gain more evidence of the benefits during the pilot programme. A public consultation seeking views on the plans to extend the Right to Control pilot ended on 21 September and among those who commented there was solid support for the extension for a further 12 months.

The Right to Control pilots are being tested in seven trail-blazing areas in England. These trail-blazers, funded by the Department for Work and Pensions, are testing the best ways to implement the right and the results will be used to inform decisions about options on the right in future. Since Right to Control was introduced in 2010, a great deal of progress has been made and over 34,000 people have benefited from it. The interim evaluation of the pilot scheme concluded that there was insufficient evidence on which to make an informed decision about the long-term future of Right to Control. The Government concluded therefore

20 Nov 2012 : Column GC147

that the best solution was to extend the pilot scheme by a further 12 months to enable us to gather more evidence of what works best, both for disabled people and for the local authorities delivering the Right to Control.

One of the authorities delivering the Right to Control has also been testing delegation of its statutory duty to review social care assessments to third parties, such as user-led organisations. Disabled people have often told us that having their support arrangements reviewed by fellow service users leads to greater satisfaction with the outcome and that the support of their peers gives them greater confidence to request a direct payment and to take control of their own support arrangements. The proposed extension will allow the trail-blazers to continue to test the delegation of this statutory duty. In conclusion, we see the proposed extension in the order as a continued commitment to the developing world of personalisation and one that fully supports the aims set out in the recent care and support White Paper and draft Bill.

This order has the support of councils and their representatives, as well as service users and their carers. It will allow the continuation of new and innovative ways of working to the benefit of individuals and their communities as a whole. More importantly, it will also maximise the evidence and outcomes available to the independent evaluation in both programmes. I commend the order to the House.

Lord Hunt of Kings Heath: My Lords, I thank the noble Earl, Lord Howe, for his full explanation of the order before us this afternoon. I find the contents to be unexceptional and it is right to avoid a hiatus in the pilots’ evaluation. The people affected should not have to go back to an old system before knowing whether the Government have decided that they should be extended, so the logic of the order is clear. I will ask the Minister about a couple of points. He mentioned evaluation. In relation to the trail-blazers pilots, he referred to the interim evaluation which, as he said, found the Right to Control had not been extended to a sufficient number of people to provide evidence to inform a decision about the future of the Right to Control approach. Will he say more about the emerging findings as to the impact on disabled people? He made a few comments about that and suggested that the signs so far are encouraging, with some positive outcomes. Could I tempt him into explaining a little more to the Committee?

I also ask the Minister about potential links between the Right to Control trail-blazers and initiatives taking place on public health. Following the debate when the order was first brought before your Lordships’ House in 2011, the noble Earl wrote to Members who had spoken to the order to say that the Right to Control trail-blazer pilot was intended to be run simultaneously with the public health budget pilots. In particular, he mentioned Manchester, where he said that there was one in-depth public health budget site—Manchester—alongside a Right to Control trail-blazer site. I wonder whether he could report anything on that. I also ask the noble Earl what feedback there has been from users of the service on Right to Control pilots.

20 Nov 2012 : Column GC148

On the adult social work practice pilots, I understand that the evaluation has been carried out by King’s College London. I have yet to track down any KCL publication on any emerging findings from those pilots. Perhaps the noble Earl could confirm whether anything has been published so far. I understand, however, that the Department for Education has published an evaluation report by King’s College London and the University of Central Lancashire on the original pilots for children and young people in care, in September 2012. That might be of interest in comparing those pilots with the pilots that are now being undertaken. That evaluation, I understand, found mixed views as to whether the pilots performed better than their local authority counterparts, or whether they represented good value for money. Would the noble Earl be prepared to comment on that? Overall, though, we of course support the extension of the pilots.

Baroness Barker: My Lords, I very much welcome the extension of these pilots. I am not quite sure why the order has to come back to the House; that seems rather strange.

I say that I welcome the extension as somebody who has been consistently critical of the premature way in which the previous Government seized upon the then interim findings of the IBSEN report into personal budgets for social care and proceeded to extend that away from the original client group on the flimsiest of evidence. I am therefore extremely pleased that the present Government are going to take a lot more time and care over these pilots. A lot is changing. A great deal has changed since 2009 when these pilots began, but there is massive, rapid and in-depth change going on in social care. I was talking the other week to a colleague who works for a major national charity and who has done some forward projections of the funding of services of some of the organisations with which she works. Believe me, if people are worried about the American economy and the cliff edge that it is coming to, they really ought to look at voluntary sector funding for the next two years. That is important and relevant, because many of the generic sources of advice to which people in need of social care go are currently under threat. In addition, health and well-being boards are in the process of being set up. That is a major change in the health and social care landscape in which these pilots are taking place. It would be advantageous if the Government were to extend, at least until 2014, its analysis of how these are working.

3.45 pm

I will ask the Minister a number of questions on two different schemes. On the social work practice pilots, will the range of analysis go beyond the service provided to individual clients within the pilot period? Will it be a wider analysis which looks at matters such as training of staff and continuity of information provided back to the local authority from the practitioners who are doing the front-line assessments? As part of that, will there be a control group of local authorities to which those local authorities in the pilot group are compared and contrasted?

20 Nov 2012 : Column GC149

On the Right to Control pilots, I was very pleased that the Minister made it absolutely clear that these pilots will work with adults with physical disabilities. These people’s needs are very different from those of a number of other social care clients. That is a key factor which was overlooked in the IBSEN pilots. Differences include the fact that user-led organisations—I presume from what the noble Lord said that he is using the definition of a user-led organisation produced by the Department of Health in, I think, 2008—have at least 40% of their boards made up of users. That is a model that is very prevalent within the world of physical disability; it is not so extensive within other client groups and that makes a distinct difference. Will there be a number of local authorities which are not members of pilots to act as controls in the analysis? My fundamental concern is that at a time of great structural change in the health service and in social care it is not just about the ability to meet the needs of service users who present in the here and now, but about the capacity of local authorities to assess future needs and to think and plan strategically to meet the future needs of people with disabilities. Will that kind of information be drawn from these assessments? That is important.

Lord Beecham: My Lords, I apologise for my late arrival at this debate; I had my calendar wrongly set. I thought that this session began at 3.30 pm. Eighteen months ago I sat where my noble friend now sits. I was then the junior health spokesman for the Opposition and he, of course, is the spokesman for the Opposition. I raised some queries at that time about the pilots while welcoming the principle. Indeed, I entirely endorse what my noble friend has said in continuing to support the concept of the pilots. Some of those questions touched on the point made or implied by the noble Baroness, Lady Barker, in relation to the changing landscape of the health service, with which we are all too familiar. The question now arises of what impact, if any, those changes have for the operation of these pilots. Will they, for example, now come within the remit of the health and well-being boards’ assessment of the joint strategic needs? Will the role of commissioning groups now be embedded in the process? Previously, of course, the PCT would have had responsibility for the health input into these arrangements. The PCTs are virtually defunct and will be over the cliff edge to which the noble Baroness referred very shortly.

I think that I also raised evaluation on the previous occasion. The document that we then considered said that the trail-blazers,

“will evaluate the best ways to implement the Right to Control”,

in relation to that aspect. The question arises as to whether that evaluation, while obviously being sensible for the trail-blazers to undertake, will be the only evaluation? Will there be a collective evaluation of the experience nationally? Will local authority health scrutiny committees be encouraged to report—I suppose that they could in any event, of their own volition—on what is happening locally in order to feed back to the department on progress? It would help to know something about that.

20 Nov 2012 : Column GC150

One other aspect of the landscape has of course changed dramatically in the past year. We now have a situation in which local authorities—social services authorities—face dramatic reductions in their budgets. My own authority, Newcastle, will have to find, over the next three years, £90 million a year, which is just over a third of its current budget. Similar positions will be found no doubt in many other social services authorities up and down the country. For all the good intentions of this pilot, it does not seem possible that these new approaches can necessarily be financed to the degree that was originally intended. Does the Minister have any thoughts about the financial position?

The noble Baroness talked about funding the voluntary sector. However, the voluntary sector will also inevitably suffer from cuts across a range of services that the sector has helped to provide, sometimes in very innovative and useful ways. Although I welcome the extension—it is obviously a sensible move—there are clearly question marks about some of the details of the operation, particularly about how this project will stand in the context of the very significant cuts, from which it will be impossible to shield all the social services provision that local authorities would wish to make.

Earl Howe: My Lords, I am grateful to all noble Lords who have spoken. In particular, I thank the noble Lord, Lord Hunt, for his welcome of the order and its content. I shall do my best to answer as many questions as I can and follow up those I am not able to answer in writing, copying to all speakers.

I begin with the trail-blazers and the Right to Control, which is where the noble Lord, Lord Hunt, began. He asked in particular about the evaluation of the programme. The interim evaluation was published in February this year and showed that disabled people are benefiting but that there is simply not enough evidence to make a decision on wider rollout. Clearly, an extension of the kind that we seek will give us more evidence. The early signs are positive but that does not provide the basis for a robust decision on permanent arrangements.

The noble Lord asked about the trail-blazer programme in Manchester and its link to public health. Officials in the Department for Work and Pensions and in my own department are working closely to ensure that the lessons from both pilots are gathered and shared. If I can provide him with any further information on that I would be happy to do so in writing. In general, we expect that the extension will provide further management information and case studies that can illustrate the potential efficiencies and the difference that the Right to Control has made to disabled people. We will also be able to capture more lessons learnt during the extension period.

The noble Baroness, Lady Barker, asked about having a control group against which to compare the results from trail-blazers. I will write to her on that point also. However, the main source of evidence will be from the service users themselves, some of whom will have experienced care under normal arrangements. It is on their feedback on the benefits that they see from the Right to Control that we will take decisions.

20 Nov 2012 : Column GC151

Turning to the social work practice pilots, the interim report was published on 2 November this year and is available on the Social Care Institute for Excellence website for all to see. It is perhaps worth outlining what we hope success will look like under these pilots: better quality of service; greater work satisfaction for staff; greater satisfaction for service users and their carers through better outcomes; greater community involvement on the part of service users, both individually and through partnership with user-led organisations; greater community cohesion through more joined-up services, because we see the SWP acting as a catalyst to encourage wider partnerships within a locality; more opportunities for volunteering; less bureaucracy and greater efficiency in systems and procedures; and integration of services. If we can capture all those benefits, the pilots will have proved their worth.

On the evaluation of SWP, the social care workforce research unit at King’s College London is independently evaluating the programme for the department. The evaluation is making good progress, with interviews with practitioners almost completed. To date, 47 participants have been interviewed from across the seven sites, including: leads from host local authorities, managers, social workers and other staff in pilots; consultants employed to assist the development of pilots; and local NHS and voluntary sector stakeholder organisation representatives. The next steps include collating evidence on user outcomes and satisfaction and data on finance processes of the SWPs. As I have already said, the final evaluation report is due to be completed towards the end of next year.

The noble Baroness, Lady Barker, asked me whether the evaluation of SWP would extend beyond the range of services that are normally encompassed. Certainly, the evaluation will also cover the effect of SWP on social workers and other practitioners, as well as on users and carers, and how the features of SWP differ from the usual practice control group. Again, if I can elaborate on that in writing, I will.

The noble Baroness also asked about other local authority services. Access to these is agreed between the local authority and the SWP as part of their contract. The SWP’s budget will reflect a proportionate transfer of funding, including corporate costs, so the SWP will be expected to make its own arrangements for support services and placements. It may also make arrangements to access those specialist services that the local authority may provide that have not been included in the funding transfer—for example, sensory impairment or HIV/AIDs—and this type of arrangement would be set out in the contract.

The noble Lord, Lord Beecham, asked about the relationship with the local authority particularly in the “new world” as we are moving to health and well-being boards. In general, both now and into the future, the local authority needs to maintain a close relationship with the SWP as it retains ultimate responsibility for the services delivered and the actions taken by the SWP, but it also needs to allow the SWP scope to innovate and make decisions about the best packages of support and services for the people in the SWP, and how to provide these. We expect the local authority to

20 Nov 2012 : Column GC152

monitor the outcomes of the SWP, identifying issues early and providing support, while allowing the SWP sufficient autonomy to decide how best to meet the needs of the people with whom it works. It could well be that in many cases it will be appropriate for the SWP to engage with the emerging clinical commissioning groups to ensure that both health and social care provided to service users is joined up. We would certainly expect that to take place in appropriate instances.

4 pm

The noble Baroness, Lady Barker, and the noble Lord, Lord Hunt, referred to the children’s pilots. We have noted the experience of the children’s SWPs and will take into account the learning from these pilots. However, adult SWPs are very different from the children’s version and as such should not be viewed in the same light. Adults’ services have worked in a mixed economy for a longer period and to a greater extent. Additionally, we have our own independent evaluation yet to report, so by not extending the pilots until this has been received would be at odds with transparent and evidence-based policy-making.

I should also have said in answer to the noble Lord, Lord Beecham, that health and well-being boards will oversee the health and support provided in their locality and the SWP is one way of providing the services agreed by them. But perhaps I may follow up the question of finance in writing after this debate.

Motion agreed.

Housing Act 1996 (Additional Preference for Armed Forces) (England) Regulations 2012

Considered in Grand Committee

4.02 pm

Moved By Baroness Hanham

That the Grand Committee do report to the House that it has considered the Housing Act 1996 (Additional Preference for Armed Forces) (England) Regulations 2012.

Relevant document: 9th Report from the Joint Committee on Statutory Instruments.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, these regulations, which were laid before the House on 18 October, will ensure that members of the Regular and Reserve Armed Forces and bereaved spouses and partners of service personnel are given priority for social housing if they need it when serving or after they have left the Armed Forces. If approved by this House and the other place, the regulations would come into effect later this month.

The Government are determined to help current and former members of the Armed Forces to gain the housing that they deserve. We have already put in place a raft of measures to deliver on our commitment. For instance, we have already made sure that serving

20 Nov 2012 : Column GC153

members of the Armed Forces have top priority for all government-funded home ownership schemes, including the FirstBuy scheme, which help families to get a foot on the housing ladder. Former service personnel also have priority for FirstBuy for up to a year after active service and, if they die in service, this priority can be transferred to a bereaved spouse or civil partner. Forces personnel are already benefiting from FirstBuy, with 143 members of the Armed Forces having already been helped to buy a home. In addition, a further 5,500 service personnel have been approved for government support to buy their own home through FirstBuy, shared ownership and the Ministry of Defence’s Armed Forces home ownership scheme.

We are providing support for wounded service personnel through increased funding for home adaptations so that those who are injured or disabled on active duty can live independently or with support in their own homes. Preventing and tackling homelessness among veterans has been one of the priorities of the Ministerial Working Group on Homelessness. However, we are also determined to ensure that service families are not disadvantaged by their service requirements and that they are given proper priority for social housing if they need it. That is why we have already changed the law by regulation to ensure that, when local authorities set the rules that decide who qualifies to go on their waiting list, they cannot apply local connection criteria to disqualify service personnel. This is in recognition of the fact that a local connection rule can disadvantage forces personnel, because the nature of their service requires them to be mobile and often not to have a permanent address. These regulations came into force on 24 August.

The law already ensures that anyone, including service men and women, who has an identified housing need—for example because they are homeless or have medical needs—is given “reasonable preference” for social housing. The statutory reasonable preference categories make certain that, overall, priority for social housing is given to those who need it most and that local authorities take a consistent approach to housing need. Nevertheless, the pressure on social housing in many parts of the country means that even those who have reasonable preference may have to wait for some time before suitable housing becomes available. The regulations before us today will go further and require that, where former and serving members of the Armed Forces are identified as having an urgent need for social housing, they are always given the highest priority—so-called “additional preference”. For other people in urgent housing need, local authorities will continue to have a power to give them high priority but will not be required to do so.

We consulted on proposals to give additional preference to those who had previously served in the Regular Forces and who were identified as having an urgent need for social housing. The consultation closed at the end of March this year. The response to the consultation was supportive of the proposed regulations, but it highlighted the housing needs of those who are still serving but who may have been seriously injured on active service and those of bereaved families. We have decided, therefore, to extend these regulations to apply

20 Nov 2012 : Column GC154

to: serving members of the Regular Armed Forces who are suffering from a serious injury, illness or disability as a result of their service; bereaved spouses and civil partners of service personnel when they have to leave service family accommodation following the death of their spouse or civil partner; and serving and former members of the Reserve Forces who are suffering from a serious illness, injury or disability as a result of their service

We set out our intention to broaden the scope of the regulations in this way in the summary analysis of responses to the consultation that we published at the end of June. We think that it is right to extend this additional priority to wounded service men and women—not just to those who have left the forces—as we recognise that they may need to move out of military accommodation to suitably adapted social housing before they complete their service. It is also right that we recognise the part that members of our Reserve Forces play, many of whom serve on the front line alongside Regular Forces. I am glad to say that most reservists return safely to civilian life. However, if they are injured on active service, they may find that their current accommodation is no longer suitable for their needs or no longer affordable, or they may have to move to access care or support.

Where members of the Armed Forces have made the ultimate sacrifice for their country, we must ensure that we continue to support their bereaved spouse or partner when they are required to leave military accommodation, just as they have given support to their spouse and partner by giving up their independence to accompany them from base to base.

Our service men and women are practical, resilient and resourceful. The vast majority of those who leave the Armed Forces will have made arrangements to meet their housing needs, often long before their service comes to an end. Nevertheless, there will continue to be some who, for whatever reason, have no home to go to when they leave. They will often be the most vulnerable. I need hardly say that we all owe a huge debt to those brave men and women in the Regular and Reserve Forces who lay their lives on the line for their country and to those who have lost their loved ones serving on the front line. We must ensure that, when they urgently need a place to live, social housing is available for them. These regulations are intended to do just that. I commend them to the House.

Lord Beecham: My Lords, all Members of your Lordships’ House would welcome any steps taken to realise the aspirations of the military covenant and to support members of the Armed Forces and their families, who do so much for us all, often in conditions of great danger and often with unhappy results in terms of their own health and well-being. To that extent, of course, we join the Minister in supporting these provisions. They build, to a degree, on actions taken by the preceding Government, who for the first time accorded equality of priority to members of the Armed Forces for housing allocation.

I cannot resist the slight temptation, however, to point out that the Localism Act 2011, which freed councils to determine who should have priority, has to

20 Nov 2012 : Column GC155

a degree been superseded in this case. I do not dissent from the judgment on that through a requirement that the military should indeed receive the highest priority, but it puts the repeated assertions of the virtues of the Localism Act in a slightly different perspective. However, I suspect that that will not much interest those who will benefit from these provisions.

Housing is a major concern of the military community. There has been a study by the Army Families Federation, from which it would appear that housing remains the most significant issue for members of the military and their families. I cannot forbear to point out that the Government have reduced their budget for providing their own direct accommodation.

Of course, as the noble Baroness has pointed out, there is a great demand for social housing. I repeat that it is right that the military should come top of the list. The fundamental problem, of course, is simply that we do not have sufficient social or affordable housing. Other measures that the previous Government introduced, in conjunction with those that the present Government have adopted, have perhaps made some impact on the access to housing and the various ways in which houses might be purchased. However, affordable housing has very much slipped down the Government’s housing agenda. It looks as though it is going to slip further, because from the recent announcements about the building programme and so on it seems that the builders will not be required to maintain the same proportion—many of us frankly thought that it was too low in any event, even under the preceding Government—of new build in the affordable category, let alone in the affordable rented category. I therefore have some concerns that, valuable though this provision is, against the context of the diminished social housing and affordable housing pools there will be greater stress on those requiring accommodation. I therefore argue for a substantial expansion of affordable housing provision, particularly in the rented sector.

Housing is a key issue for members of the military and their families, but it is not the only issue; I am sure that the Minister would agree with that. Unhappily, veterans are found in greater numbers among those who come before the courts and who suffer from post-traumatic stress and other mental health disorders. In addition to providing adequate, proper social housing places in which people who have served their country in this way want to live, we need to provide the other services that will help them to reintegrate into the community and lead the normal life to which they would aspire.

My authority, on behalf of the Association of North East Councils—I was not personally involved in this—produced a report last year about the position of veterans in relation to health services and other matters. I will ensure that the Minister receives a copy of that. It is not just a matter for her department; it clearly extends to other departments, notably, but not exclusively, the Department of Health. A more holistic approach would complement the priority that these regulations justly provide for those in the community to whom we all owe a great deal.

20 Nov 2012 : Column GC156

4.15 pm

Lord Palmer of Childs Hill: My Lords, first, I apologise to my noble friend the Minister for missing the beginning of what she said. I was contributing to the debate on the Statement in the Chamber, so I hope that I will be forgiven for being a few minutes late. I declare an interest because I am still a councillor for the London Borough of Barnet, and my comments will take that into account. Of course, I echo the comments about the debt that we owe our veterans. Speaking on defence, as I do, I make these comments about our Armed Forces very often from another angle.

The point that I want to explore is whether local authorities and housing associations are really going to be aware of these provisions. Yes, they will be told, but my experience of local authorities is that there are all sorts of provisions and my guess is that these will not figure very highly unless they are very much promoted with all those local authorities.

How will these provisions affect those local authorities that have little housing stock? Only this week I have been dealing with someone who has a brain tumour, three children and a husband partially in work, and they have been graded only at grade 2 rather than grade 1; they were evicted on Monday and I have been concerned with finding them some accommodation. I use that as an example of how in the London boroughs, certainly in north-west London, there is a great lack of housing, and to put this additional strain on them is going to make it even more difficult for people such as this woman. I think that I have got her into a house, but they are still dealing with the void and getting it into a state for her to go there. It has taken me since March, knowing that she was going to be evicted, to do this. How do we house the veterans and people whom we need to?

Another point is how the claimants decide in which geographical area to seek to exercise their claim. If you have been in Germany or Afghanistan or wherever and you do not really have a base other than a military base at, say, Colchester, where do you go to exercise your claim on a local authority? There are some places in the UK where there is spare housing but, in the places that I know, this does not apply.

Have the Government consulted veterans’ associations? Our veterans’ associations in the UK are nothing like the veterans’ associations in the United States. There is a good argument for consulting them and perhaps trying to tie in with these regulations previous debates that we have had on the Armed Forces covenant over how we deal with housing for members of the Armed Forces. With the return of service personnel from Germany and Afghanistan, and the fact that they are going to be based more permanently in garrison towns, there was talk during consideration of the Armed Forces Bill of encouraging members of the Armed Forces to purchase property in the area in which they would now live more permanently—previously they were not living permanently anywhere—so that when they retired or were invalided out there would be a house or a flat nearby that they owned. We are trying to encompass within social housing a large group of people for whom there is not enough social housing.

20 Nov 2012 : Column GC157

I hope that when the Government consider this they will think outside the box about how, looking in the longer term, we can encourage people in the forces to acquire properties in their own right that they can then live in in their retirement or disablement, rather than trying to squash people into an area of social housing that does not exist in many parts, particularly in London.

Baroness Hanham: My Lords, I thank the two noble Lords for their contributions. To start with the noble Lord, Lord Palmer, the veterans’ associations have been consulted. It was largely because of their response that the changes were made following that consultation to ensure that the Reserve Forces were included in this, and also serving members. When the regulations started, they were for those who had left the Army and were not serving at the time. These changes have been made as a result of that.

I appreciate that the noble Lords, Lord Beecham and Lord Palmer, said that there is not a huge excess—if I can put it that way—of social housing. These regulations are very specific and put to the top of the pile those who have been injured and have to leave their place in their barracks, or wherever they are, and who have nowhere else to go and need adapted or new property. It is not clear at the moment how many this will amount to. However, it is perfectly clear that the able-bodied who are leaving the service will either have made their own provision, which I suggested they would have done before they leave, or will have to make it subsequently—they will not be at that top priority level. We are looking particularly at those who are most vulnerable. Members of the Armed Forces are of course already within the top priority for housing as far as regulations are concerned. This just takes them out of that top priority and puts them one higher. Local authorities have always had to have some form of priority and, although the noble Lord, Lord Beecham, is right about localism, I think that they will accept this as an edict that they will not complain too much about.

As for guidance and whether anybody will know anything about it, we have produced new guidance that has made it clear that these regulations are being put forward. We will also be writing to local authorities when the regulations finally come into force to draw their attention to that. I am sure that the noble Lord’s authority will be well aware of them; if not, I am sure that he will draw them to its attention.

It will be up to anybody claiming a local connection to decide where they want to go. If somebody comes back wounded from Afghanistan in need of housing accommodation and decides that they want to go and live in Sheffield, to Sheffield they will go and they will go to the top of the list. If they want to come to the noble Lord’s borough, they will do the same. The local connection, which applies to practically every housing matter other than this, including homelessness, does not apply.

Those are the main points. I am not going to open up the debate on affordable housing, as I think the noble Lord, Lord Beecham, was tempting me to do. I will say only that he and I know that great efforts are being made to ensure that there is more affordable

20 Nov 2012 : Column GC158

housing. If we can get the Ministry of Defence to release quite a lot of its property and land, we may be able to move that on. I hope that, with those explanations, noble Lords are happy for these regulations to be agreed.

Motion agreed.

Legal Services Act 2007 (The Law Society) (Modification of Functions) (Amendment) Order 2012

Considered in Grand Committee

4.25 pm

Moved By Lord McNally

That the Grand Committee do report to the House that it has considered the Legal Services Act 2007 (The Law Society) (Modification of Functions) (Amendment) Order 2012.

Relevant document: 8th Report from the Joint Committee on Statutory Instruments.

The Minister of State, Ministry of Justice (Lord McNally): My Lords, the purpose of this order is to remove the provisions of the schedule to the Legal Services Act 2007 (The Law Society and The Council for Licensed Conveyancers) (Modification of Functions) Order 2011 which bring to an end the Law Society’s powers to make compensation arrangements for licensed bodies on 31 December this year. The Legal Services Act 2007 sets out a framework for the regulation of legal services in England and Wales. Part 5 of the 2007 Act sets out arrangements under which licensing authorities, which are legal service regulators that have been designated for this purpose under the 2007 Act, may license firms which are partly or wholly owned or controlled by non-lawyers, to provide legal services or a mixture of legal and non-legal services. Such firms are known as licensed bodies and are sometimes referred to as “alternative business structures”.

The Law Society was designated as a licensing authority under the Legal Services Act 2007 on 23 December last year. Under the 2007 Act, Section 83 requires all licensing authorities to have compensation arrangements in place to protect consumers of licensed bodies. Noble Lords may remember that one of the provisions of the 2011 order was to extend the Law Society’s existing powers in relation to compensation arrangements under the Solicitors Act 1974 to allow it to make rules about compensation arrangements for licensed bodies. However, this extension of powers was to apply only for a transitional period, which will end on 31 December this year.

During the Committee debate on the 2011 order, I mentioned that the sunset clause was included in the 2011 order. This was because the Solicitors Regulation Authority, the regulatory arm of the Law Society, had announced during the drafting stages of the 2011 order that it was undertaking a review of its compensation fund and expected that new long-term compensation arrangements would be in place by the end of December 2012 for all types of solicitors, including

20 Nov 2012 : Column GC159

ABS bodies, following the conclusion of the review. The SRA only issued its first ABS licences in March 2012, which was later than had originally been envisaged at the time the 2011 order was laid, and sufficient information is not yet available. The SRA therefore asked that the current arrangements be extended and asked for a further Section 69 order to be made. Following discussion with the Legal Services Board, the oversight regulator for legal services, the LSB consulted on the issue in June 2012 and made its recommendations to the Lord Chancellor in August. Having considered the responses to that consultation, it recommended that the sunset clause should be removed. A new sunset clause has not been included under this order so as to avoid imposing an artificial deadline on the development of alternative compensation proposals which may not be in the best interests of consumers or practitioners.

Although the SRA has committed to review the current compensation arrangements over the next two years, that review may result in changes to the current arrangements. Without knowing what those arrangements will be, it is difficult to estimate how long any changes may take to implement. The Legal Services Board will monitor the review and expects the SRA to provide public indications of its progress.

I am sure that noble Lords will appreciate the importance of enabling the existing compensation arrangements set out in the 2011 order to remain in place beyond the end of this year. That will ensure that the Law Society, a statutory body that requires a statutory basis for its compensation fund, can continue to comply with the requirement to have licensing rules about compensation arrangements and, critically, ensure that consumers of ABS firms have continuous access to compensation. I therefore commend this draft order to the Committee and I beg to move.

4.30 pm

Lord Beecham: My Lords, I ought to declare an interest as a member of the Law Society and as a virtually non-practising solicitor, who in his professional career has no doubt contributed significantly to the assets of the compensation fund without, as I recall, having to draw down from it, no doubt to the satisfaction of my former clients.

The Solicitors Regulation Authority makes the Circumlocution Office look like a model of efficiency, to judge by the delays in its approach to this matter. It does not seem to have thoroughly mastered the implications of the complex structure that has been created as a result of the formation of alternative business structures, to use the jargon that the Minister referred to. Many of us have reservations about these new bodies but, be that as it may, they are with us and they certainly have to be regulated—in particular, there has to be proper provision for compensation where things go wrong.

It appears that the SRA is to review these compensation arrangements as part of what it calls a root-and-branch review in two years’ time. The Law Society concedes that it would be sensible to extend the time during which the present arrangements continue, but it is far

20 Nov 2012 : Column GC160

from certain that the SRA has the necessary resources to conduct that review thoroughly and properly. Perhaps the Minister could indicate what assurances he has received about the resources and the timeframe and whether the MoJ will be in regular contact with the SRA to try to ensure that a timetable is agreed and kept to. It is clearly important, given the likely growth of these new structures and the potential for claims to arise in the mean time, that the system is improved as rapidly as possible. As I say, it is not clear—to the Law Society, at any rate—that the SRA is in a position to do that. There are other problems with the SRA, with which the Minister is no doubt familiar, but those are not a matter for discussion today.

In the Law Society’s view, there is also a case for looking at the compensation fund as a whole. The society has for some time been calling for a review to look at the impact of the new structures and whether it is still appropriate for there to be a single fund covering both types of practice—traditional solicitors’ practices and those of the new structures. The new structures will, of course, embrace non-solicitors as well as some solicitors and they may reach out into areas other than traditional legal practice, so there is a question whether the scheme would apply to non-legal activity and so on. All this seems to be somewhat vague at the moment.

The Law Society also points to the need to consider the impact of a recent decision by the authority to transfer the cover for non-applied firms from a risk pool to the compensation fund. That apparently exposes the fund to a new type of claim relating to negligence and negligent actions.

There is also a question of whether the present management arrangements are up to dealing with these complex new positions. I acknowledge that none of this is the direct responsibility of the department, but given that the department, under the previous Government and now under the current Government, is establishing the framework, it is surely necessary for the department to take an active interest to ensure that a satisfactory position is achieved. We do not want a position in which either the legal profession is paid, as it were, for the possible errors of the new structures, or in which people find it difficult to obtain compensation when they should have it. While it is obviously necessary for this extension to take place, I urge the Minister to indicate that his department will be conscious of the need to ensure, as far as it can, that the SRA carries out what is expected of it within that timescale and no later and that it has adequate professional and technical resources to do the job.

Lord McNally: My Lords, I thank the noble Lord, Lord Beecham, for that response. I am aware of his long and detailed knowledge of the solicitors’ profession, so I was trembling a little that I was going to be baffled by professional science. He indicated, I must say, a slight irritation on my part that one looks pretty silly when one puts in a sunset clause then has to come back and say, “Please, lift it”. The intention was good—it being thought that the presence of a sunset clause would produce a sense of urgency in the Solicitors Regulation Authority—but that was, perhaps, overoptimistic. Not putting in another sunset clause is

20 Nov 2012 : Column GC161

common sense—better that we tell them to get on with it—and I fully take his point that my department should take a close interest in the matter. The review is primarily a matter for the SRA and details of the review will be in its strategic plan. However, the Legal Services Board, the oversight regulator of the legal services framework, has indicated that it expects the SRA to report on progress. I assure the noble Lord that I will keep an eye on progress, because I do not want to come back here to tell him that there has been none.

The SRA has assured us that it is now in a better position to complete a fundamental review of its compensation arrangements, which will determine the best solution for the compensation arrangements, not only for ABSs, but for traditional firms. It is therefore too early at this stage to get any views to dictate the outcome of the review. The SRA will note the irritation from all bodies—the Law Society, the LSB, the MoJ and the Official Opposition—and I hope that that, even more than a sunset clause, will spur it to action. Work on the review has started and the detailed scope of the project has been developed. The SRA held a meeting with the LSB to discuss and agree the detailed scope and the project scope and methodology has been approved by the financial protection committee, a sub-committee of the SRA board. A summary of the scope and methodology will be published on the SRA website in December 2012.

The project has now entered a research phase and initial meetings with stakeholders are being held. The SRA is committed to transparency of research in this area and has undertaken to publish information and research findings throughout the project. The SRA was able to dedicate policy resources to the compensation arrangement review from June 2012. However, data-gathering started earlier, in spring 2012. I can assure the Committee that work is now under way, and I and the MoJ will continue to keep a very close interest in progress.

Motion agreed.

Producer Responsibility Obligations (Packaging Waste) (Amendment) Regulations 2012

Considered in Grand Committee

4.41 pm

Moved By Lord De Mauley

That the Grand Committee do report to the House that it has considered the Producer Responsibility Obligations (Packaging Waste) (Amendment) Regulations 2012.

Relevant document: 9th Report from the Joint Committee on Statutory Instruments

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley): My Lords, these regulations seek to set new recovery and recycling targets for packaging waste for 2013 to 2017.

20 Nov 2012 : Column GC162

Packaging performs an important role. Last year 11 million tonnes of packaging were used in the United Kingdom to get products from where they were produced to where they were consumed with minimal damage and wastage. However, once packaging has fulfilled its purpose, the question becomes: what should be done with it? Reusing packaging would be ideal but as this is not possible in many cases, recycling is usually the best option for recovering the value—in both economic and environmental terms.

The Government want the UK to move towards a zero-waste economy. Rather than an economy where no waste at all is produced, we envisage one where resources are fully valued. We want to see material resources reused, recycled or recovered wherever possible, and only disposed of as a last resort. The targets before the Committee today will play an important part in achieving this vision. They will help the UK go further in recovering the value of discarded packaging materials and help tackle the wasteful practice of burying them in landfill.

Furthermore, like other EU countries, the UK is required by the EU directive on packaging and packaging waste to recover each year a minimum 60% of all packaging waste, of which 55% must be recycled. Within this overall target, there are also recycling targets for individual packaging material types, including metal, paper, glass, plastic and wood. The UK achieves these targets through the producer responsibility system we have put in place, established by the Producer Responsibility Obligations (Packaging Waste) Regulations 2007.

The existing regulations set recycling targets for packaging producers until the end of 2012. We now need to put measures in place to ensure that the UK continues to meet the EU packaging recycling targets in future years, and to ensure packaging waste continues to be recycled. If we do not, this will result in the removal of important financial support for the recycling system in this country, and we can expect current recycling rates to drop. Furthermore, we can expect costly infraction proceedings for failing to implement the EU directive. However, there is a more important reason for these targets. As valuable resources for our industries get scarcer and more expensive, we need processes in place to recycle properly and recover them to maintain as much of their value as we can in the economy. The proposed targets for the period 2013-17 will maintain the current levels of recycling of paper, wood and glass. They will also set a trajectory for increased recycling of aluminium, which we want to see increase by 3 percentage points per year; plastic, by 5 percentage points per year; and steel, by 1 percentage point per year.

4.45 pm

The largest increase under the targets proposed will be in plastic packaging recycling. The target under consideration today will increase the UK’s plastic recycling rate from 24% to 42% in 2017. This is an ambitious target compared with where we are now. At present the UK’s recycling rate puts us towards the bottom of the EU league table. I acknowledge that there are concerns about this, but we need to do better.

20 Nov 2012 : Column GC163

Our analysis shows that this target will deliver a net benefit to UK plc as a result of the increased revenues generated by the greater volumes of valuable plastic material collected for recycling.

The regulations before the Committee also introduce a split target for glass. This is a reflection of the two main types of end market for recovered glass: use in remelt, so glass bottles are turned back into glass bottles; and use in non-remelt applications, such as aggregate used in construction. As remelt uses offer greater environmental benefits than non-remelt applications, the split target will in effect freeze the proportion of recovered glass which can be sent to non-remelt applications at the 37% seen currently. These targets offer both economic and environmental benefits. They show that economic growth and improving the environment can go hand in hand.

I accept that the economic benefits are not shared equally by everyone. These regulations will place an increased cost burden on producers of packaging materials and I know that some of these companies believe we should have lower targets or targets that escalate more slowly. The Committee will hear some of these concerns in the debate today, but overall these targets will provide benefits to businesses, including creating jobs in the recycling sector. Under the PRN system, money paid by producers of packaging goes to reprocessors and exporters. They then spend this money on collection, developing capacity and creating end markets for material. Government predictions are that average annual sales growth in the UK is expected to accelerate to 3.8% each year in recycling and recovery, and 3% in waste management over the next five years. The new recycling targets will help to support that growth.

Importantly, these targets set the future direction for the UK’s recycling economy and provide business with the confidence with which to plan and invest for the future. Just in the past few months, we have seen exciting developments in the plastics recycling sector despite the very challenging economic climate. We have seen the opening of a new plastic recycling facility in Rainham. This £5 million investment has created 45 jobs. A new plastic recycling plant has also opened in Lincolnshire. This represents a £15 million investment creating 30 new jobs. These facilities were in the pipeline before the Government announced their decision to introduce these targets in the Budget. However, that announcement has undoubtedly helped to boost confidence in the sector and these examples give a flavour of the developments we can expect to see.

As well as economic, there are clearly environmental benefits to increasing the amount of packaging which is recovered and recycled. The key environmental benefit of the targets is the greenhouse gas savings associated with diverting material from landfill and better resource efficiency. Replacing the use of virgin materials in packaging with recycled ones leads to significant energy and carbon savings. Overall, we estimate the whole package of targets will provide a net benefit to the UK economy of over £180 million, including about £9 million arising from reducing carbon equivalent emissions by 2 million tonnes over the period 2013-17.

20 Nov 2012 : Column GC164

These regulations will help enable the UK to achieve its ambitions on recycling, ensure that we continue to meet our EU obligations, and generate economic and environmental benefits. I hope that I have explained what is intended and I look forward to hearing the views of the Committee. I beg to move.

Lord Jenkin of Roding: My Lords, I am grateful to my noble friend for explaining so clearly the purpose of these regulations. I suspect that over the past couple of weeks he has had to undergo something of a crash course in recycling and the associated functions that go with it. Later I will refer in more detail to a meeting that he was able to hold with me and with representatives of the plastics industry as recently as 8 November, which is less than two weeks ago. I have to say that there has been a huge amount of activity since then.

Perhaps I may take a moment to rehearse the earlier history. I should declare an interest in that for some 13 years I worked in the plastics industry, although it was a very long time ago. However, I am familiar with some of the materials we have been discussing. On 1 May, I was approached by representatives of the two main trade associations, the British Plastics Federation and the Packaging and Films Association—films meaning bags rather than movies—who came with very clear messages. They said that they had been seeking to discuss these matters with officials in Defra, but were given the clear impression that they simply were not listening. They had asked to see a Minister, but were told firmly that that would be wholly inappropriate. They then sought my help.

My first move was to approach my noble friend’s predecessor, my noble friend Lord Taylor of Holbeach, for whom I have very high regard. After some hesitation his private office said that no, a meeting would be quite inappropriate. I have never discovered why, although I have made inquiries. I then said to his office, “Look, the noble Lord cannot refuse to see me”. That is par for the course since he really is obliged to do so, and eventually we were able to fix a date on 25 June. However, nearly two months had now gone by since my first approach. I put the case to my noble friend in his capacity as the former Minister, who said, “Yes, of course I can agree. The difficulty has been removed”. But I am afraid that I never understood what the difficulty was—I have a horrid suspicion that the difficulty may be sitting behind the Minister now, but that is a different matter to which I shall come later.

It took a month before the Minister’s private office came up with a date. I saw him on 25 June, and on 25 July his officials said, “The Minister will be pleased to see your deputation on 23 October”, by which time four months would have gone by. I asked why the meeting had to be as late as that, and was told that the Summer Recess was coming up and that it would not be possible to meet the deputation during that time. This is a matter of no criticism whatever either of the department or of the present Minister, who on 23 October was faced with having to deal with the Statement on badgers. I have said to many people that, in his position, I would have done exactly the same. I would have said, “Clear my diary. This Statement is going to be difficult to handle”, and that is inevitably what happened.

20 Nov 2012 : Column GC165

So, in the end, we had the reshuffle and the Minister changed. I welcomed very warmly my noble friend Lord De Mauley’s readiness to hear the case, and the meeting was fixed for 8 November.

The industry put its case very clearly and in some detail as to why it felt that these targets were wrong. Its main message was that they are unachievable. It made the point, and I made it myself, that there really is no point in Governments setting targets that they are told by the people who are going to have to deliver them are unachievable. No doubt my noble friend will confirm this, but I got the impression that he was impressed by the strength and detail of the industry’s case. He turned to his officials and said, “Surely the right thing here is for the two sides to get together and find a compromise”. We were all rather shattered when the senior official present answered blandly, “Well it is just too late—the order’s been laid and we can’t change it now”. They had been talking for an hour before the Minister was told that there was no point in listening because it could not be changed. The industry was very angry, as I am sure noble Lords will understand, and the meeting broke up in some tension.

I had a few words with the Minister afterwards when he very kindly agreed to stay and he has moved very quickly since then. There was an immediate invitation to the industry to set out the details of its objections to the order in writing. A meeting took place in the department and officials were instructed to respond to those objections point by point. A paper setting out the arguments would then be submitted to my noble friend for his approval, which was then to be sent to me. That is, in fact, what happened, and I duly got the paper last Friday. It consisted of 14 closely typed pages of print, including point and counterpoint, which, with the benefit of computers, I was able to forward immediately to the industry. It goes into a great deal of detail and I do not propose to weary the Grand Committee with that now. However, the immediate reaction of the industry, which I found very interesting, is in a quote that it sent me by e-mail:

“It is the first time they have responded in detail to our concerns”.

This was as a result of my noble friend’s initiative, which we very much welcomed. At the meeting, the industry had continually asked where the department’s evidence was to support what it had put into the order and why officials had so far taken no notice of the concerns that the industry had first voiced during the consultation period earlier in the year. At least now, they had to answer the points, which are in that 14-page paper.

I asked the industry for its comments over the weekend and I got them late on Sunday night. This time, it was 15 pages of very detailed analysis of Defra’s answers. However, the industry was still dismayed that there was absolutely no sign of the department recognising the validity of its concerns. As I have said, my very first reaction to all this was to ask why this was not all done months ago, why all these exchanges— 29 pages of exchanges—did not happen before and why we had to wait for my noble friend the Minister to intervene before his officials were prepared to answer the industry’s concerns.

20 Nov 2012 : Column GC166

The essence of the industry’s case has been, from the beginning, that it has no quarrel whatever with the department’s objective of increasing the collection and recycling of plastic waste. Indeed, its own objective—to which it has given the title, Plastics 2020 Challenge—is to ensure that no plastic goes to landfill by 2020, and that the maximum amount should be recycled and reused. This is something I would have thought the Government would have accepted. The department’s objective, which my noble friend spelled out, was that the policy should go further and faster than that, and indeed further and faster than was required by the EU directive of some years ago. Again, I will not go into the details of that, but it is a fact: the department is going faster than the EU directive requires.

5 pm

Moreover, the industry’s complaint is that the department seems entirely to have ignored the recommendations of its own expert advisory body. I will get the right title as I must quote these things properly. It is the Advisory Committee on Packaging, generally known as the ACP. It has nothing to do with Conservative Peers. The committee gave very clear advice in 2011 about the maximum speed at which plastics recycling could develop in the United Kingdom. The department simply assumed that there was far more scope to accelerate the rate of collection and recycling, even of some of the more difficult materials to which my noble friend referred a moment ago—and in particular assumed that there could be a substantial increase in the recycling of commercial and industrial waste, although it is widely recognised that for a variety of reasons this has very nearly reached its maximum.

The ACP stated in its 2012 annual report:

“Meeting the stretching plastic recycling targets set by the Government represents a significant challenge to industry”.

When my noble friend said “ambitious”, he was understating the case. The report continues:

“However there is also a particular challenge in plastics because it is a much more diverse material than the other categories, with a large number of different polymer types and formats with very different characteristics, which mostly cannot be mixed for recycling”.

I recognise that some of the new equipment that has recently been installed has quite high technology and is beginning to be able to do some of that mechanical sorting—but there is still a great deal that cannot be done.

My first question to my noble friend is: why did officials ignore the warnings by the ACP about the very challenging nature of the targets they were minded to set? But the situation is worse than that. Here I come to the Secondary Legislation Scrutiny Committee. Paragraph 12 of its report—I will quote only one sentence—refers to the consultation and states:

“Overall, despite specific concerns, respondents supported the proposals for increased targets”.

I looked for the source of that statement and discussed it both with the clerk to the Scrutiny Committee and with my noble friend Lord Goodlad, who is chairman of the committee. The Explanatory Memorandum stated clearly:

“Overall, respondents were supportive of increasing targets”.

20 Nov 2012 : Column GC167

It went on to mention some of the concerns that my noble friend mentioned a moment ago.

In these circumstances, it is not surprising that the scrutiny committee used the same words and gave the impression that there was no controversy about this. The scrutiny committee remained totally unaware that the producers of plastics, on whom the order places the entire responsibility for meeting these targets, had from the outset declared their grave concerns and deep unhappiness about what was in the order. Noble Lords may wonder why the department couched that in such neutral language—it was to mislead the scrutiny committee, which in turn inevitably has misled the House. I find this really very disappointing.

I ask my noble friend for three undertakings as to how this situation can be rescued. First, I return to the recommendations of the Advisory Committee on Packaging, which said very clearly that there should be a mid-term review of the impact of the order. The ACP report said:

“The ACP will continue to monitor progress on a quarterly basis to show progress. In its response to the consultation on the review of targets the ACP suggested that a formal review midterm would be helpful especially as delivery depends not solely upon producer responsibility”—

but also the contributions of local authorities in collecting the material concerned. The reports—29 pages of detailed exchanges—give a number of very good reasons why there needs to be a mid-term review.

The Minister’s paper contains several references to documents that still have to be published. There is a document to be called the “quality action plan”. It is very clear that that has not been published. Nobody knows what is in it. There are references to a number of very questionable statistics, which the department has not wholly denied. These need to be clarified. There are references to a growing evident unwillingness of the Chinese Government to continue absorbing the huge quantities of recyclate that have recently been shipped to them. Given these uncertainties, the argument for a review has become absolutely overwhelming and I hope my noble friend, in his reply to this debate, will be able to agree with that.

Secondly, if the review is to be properly informed, the discussions that have been going on so far for less than two weeks, following my noble friend’s intervention, should be continued. I put this to the two trade associations this morning and they agree. Despite their earlier unhappiness, they have told me they are very ready to continue the discussions in good faith. I ask my noble friend to instruct his officials to respond also in good faith.

Thirdly, and perhaps most fundamentally, I have been left with a very clear impression that my noble friend’s officials, having reached their decision on the policy and its implementation, closed their minds to any criticism or to any alternative route to the agreed objective. They had made up their minds and nothing—nothing, my Lords—was going to be allowed to deflect them one inch from that course.

It is not only the plastics industry that has had this experience. It so happens that last week I met representatives of the glass industry who are wanting

20 Nov 2012 : Column GC168

to set up a glass academy, which I totally support. I asked them for their reaction—they are dealt with in the order, as my noble friend rightly said. They told me and put it in writing afterwards:

“There have been very few attempts to set up face-to-face discussions with industry representatives. Instead, a broad document has been developed which takes into account individual, written responses. When British Glass has sought to set up meetings in order to rectify this, its requests have been ignored or side-lined by delays”.

That sounds familiar.

“As a result, there have been very few meetings held with the Defra official responsible, Ian Atkinson, in the last year. When meetings do take place, they tend to be very one-sided. Whilst officials listen to industry during the meetings, and may agree on issues during the meeting, there has been no resulting action taken”.

I am not alone in viewing this as an extremely unsatisfactory state of affairs. If the department is allowed to continue in the same vein of simply not listening to people with genuine complaints, it surely puts at risk the success of a very important part of the department’s environmental and recycling objectives. It cannot be right all along to alienate those upon whom the department is going to rely for the delivery of the policies it seeks to implement. Yet that is precisely what has been happening and I hope my noble friend will agree that it must be stopped.

The Earl of Lindsay: My Lords, I, too, thank my noble friend for introducing these draft regulations and setting out the objectives that he and his department seek to achieve. I preface my remarks by declaring an interest as a non-executive director of British Polythene Industries, Europe’s largest manufacturer and recycler of polythene products. BPI has production and recycling operations in the UK, the European Union, North America and China.

I wholly associate myself with the remarks of my noble friend Lord Jenkin of Roding. I have had access to much of the same documentation and analysis from the industry that he has had, in addition to the analysis and forecasting that is available to companies such as BPI. There are, as my noble friend set out, a very large number of detailed concerns about the substance and detail of what these proposed regulations seek to implement. I do not intend to go into the depth of those details, nor do I intend to dwell on the real unhappiness that many in the industry feel about so many of the issues that relate to the process that culminated in these proposed regulations. Once again, my noble friend has set out some of the specific concerns related to that process—indeed, the unhappiness is manifest and deals with many more points than any of us would be comfortable about.

The nature of the discussions between the industry and the department has left many in the industry very upset. The extent to which the industry has felt that its input and advice has not been efficiently, effectively or actively sought, welcomed or understood is another source of unhappiness. My noble friend mentioned the difficulties the industry has had in being able to engage with the relevant Minister. The extent to which the department is felt by many in the industry to have based the case on evidence that it has been assembling

20 Nov 2012 : Column GC169

has caused serious unhappiness, given the very late hour at which that evidence became evident to the industry.

For the purposes of this debate, suffice it to say that we are where we are. The main focus should therefore be on how we move forward from these draft regulations, and perhaps look at that more than how we arrived at this unhappy state of affairs. It is in that spirit that I echo my noble friend Lord Jenkin of Roding in stressing that the industry remains ready and willing to engage positively in whatever is the best way forward.

5.15 pm

With that as a starting point, soundings from some of the key players in the industry suggest that it is not so much a question of not being able to achieve the targets set out in this draft regulation, but much more about the timescale attached to those targets. Given the depth of the industry’s concerns about the calibration of targets and timescale and the importance and scale of those in the industry who have these concerns, there must surely be a strong case for reviewing the timescales in respect of the targets and allowing amendments to be made mid-term if there is a case for them. In putting that point, I echo a similar point made by my noble friend Lord Jenkin of Roding.

It is undoubtedly unfortunate that discussions to date between the department and the industry have not enabled more realistic timescales to have been developed or the proposed timescales set out in these regulations to have been fully discussed and reviewed, so that if a sound case had been made, they could have been amended. We would then have been looking at regulations that commanded a much greater degree of unanimity. I would therefore like to put two questions to the Minister, which are much in the same vein as those of my noble friend. First, given the industry’s willingness to engage positively on these draft regulations, before they become enshrined and implemented is there not an opportunity for the industry and government to review and if necessary revise the details, especially the timescales set out against the targets?

To have got to this stage with such a difference of opinion is not satisfactory. I do not say that just as someone currently involved with the industry, but as a former deputy chair of the Better Regulation Commission and a former joint chair of the Government’s Risk and Regulation Advisory Council. It cannot be good governance or good regulation to bring forward a statute where there is such a stark difference of opinion and such conflicting assessments between those who set policy objectives and those who have to deliver them. So my first question to the Minister is whether there is not still an opportunity before these draft regulations take effect to review and if necessary revise the timescale attaching to the targets.

My second question is in line with what my noble friend Lord Jenkin put to the Minister. If it is not possible to review and revise what is before us, can we now have a commitment from the Minister on behalf of the Government that there will be an interim review of the details set out in these regulations, specifically of the timescales attached to the targets set. If it is at all possible, could we seek to entrench that commitment

20 Nov 2012 : Column GC170

in the legislation so that in, say, two years’ time there is certainty that the timescales will be reviewed and that that review process will lead to a revision if a proper case is made for it?

Lord Knight of Weymouth: My Lords, given the debate so far, the Minister might be pleased to know that we support these regulations which build on the 2007 regulations brought in by the last Government. Obviously we are mindful of the impact assessment on the estimate that £400 million-worth of overall benefits have derived from them, so it is good that there are occasions when this Government believe that statutory targets and regulation can bring an economic benefit. That is not always the message we hear. However, I note the comments that have been made by the noble Lord, Lord Jenkin, and the noble Earl, Lord Lindsay. Given the first question put by the noble Earl, I am also concerned about the timing of the regulations. Should the Minister listen to our debate and decide that, unlikely as it may seem, it might be best to withdraw the regulations and think again, there would not be time to bring forward new regulations before those currently in force will run out at the end of the year. We would then be in a very awkward position.

In effect, there is a fait accompli in respect of these regulations. I do not think that that is desirable and it is not good, transparent law-making. Indeed, the sorry tale of lack of engagement with the industry related by the noble Lord also suggests that there are some in Defra who perhaps need to smell the coffee in terms of how good law-making is conducted. The days of “Whitehall knows best” are over so far as the public are concerned, and we need to ensure that there is proper engagement—even with those who you know are going to oppose the laws we are making—so as to ensure that the best possible compromise between the competing interests is arrived at. I think that the estimate in the impact analysis was that there would be losses of just over £22 million to business as a result of these regulations. There are going to be losers as well as those who will benefit from the jobs and economic activity that attaches to recycling. I want to make those points of sympathy, even though we are on different sides of the argument in respect of these regulations, for the comments of the noble Lord, Lord Jenkin, and the noble Earl, Lord Lindsay.

The only questions I have for the Minister are to try better to understand what criteria he used in setting these new levels. We have heard figures like three percentage points a year for aluminium, five for plastics, one for steel, while glass is being held on the assumption that the target will be split by end use. There are other targets for paper, wood and so on. The department must have carried out a sensitivity analysis of what is the right level of increase that is sustainable for the packaging industry and in terms of capacity in the recycling industry. Even if he cannot give us a detailed assessment now, it would be interesting if he could either point to where the analysis is in the Explanatory Notes—if it is there, I have lost it—or if he would drop us a note to let us know. I am sure that that transparency will be useful as the ongoing discussions take place.

20 Nov 2012 : Column GC171

My second question is asked in part on behalf of my noble friend Lord Haskel, who was hoping to speak in the debate, but while he has been able to move in and out of it, unfortunately he missed the opening speeches and so feels unable to contribute. He, too, is critical of these regulations. One question that he was going to ask—it is in his speaking note, which I have seen—concerns the adequacy of local collection services, and what analysis the department has made of the capacity of the services to deliver on these regulations. Clearly, if the recycling cannot be collected, the system will not work very well. Any answer on that for my noble friend and for me would be gratefully received.

Finally, I am interested in the Minister’s views on what will happen after 2017 when the regulations run out. I am sure that if he is sympathetic to the notion of a mid-term review, which he has been asked about, we would be interested to hear that, too. Does he think that continuing with targets is the right way forward post 2017, or is this a measure to extend the existing approach while he thinks about a new one? What is his view on whether the infrastructure is broadly right, and whether it will remain stable and go beyond 2017? Any indication on that would be well received by the interested parties who will be listening carefully to his comments as the responsible Minister. I know that often he has to respond for other Ministers in the department, but in this case we are hearing the words direct from the Minister’s mouth, and anything he can give us to elucidate these matters will be warmly received. As I said, I am broadly supportive of the regulations.

Lord Jenkin of Roding: Perhaps I may remind the noble Lord that the policy produced by the industry—the Plastics 2020 Challenge—continues to 2020. The industry would ensure by then that nothing will go to landfill.

Lord Knight of Weymouth: In making that comment, the noble Lord reinforces his point that engagement with the industry is a wise course, alongside engagement with the recycling industry, which stands to gain more business and more employment as a result of these regulations.

Lord De Mauley: My Lords, I start by thanking noble Lords for taking the time to get into this very complicated subject and to debate these important issues today. I listened very carefully to the points made, including to very specific concerns about aspects of the regulations, and will try to answer as many of them as I can. Before I respond to the points about targets, I will address concerns raised about the process of developing the regulations.

First, I assure the Committee that all responses received to the consultation were given due consideration, and that information presented was taken into account when building the evidence. I can only apologise sincerely to my noble friend Lord Jenkin for the time it took him to get a meeting. I will add that I hear clearly the message of my noble friend Lord Lindsay. As part of the consultation process, my department considered

20 Nov 2012 : Column GC172

carefully the advice of the Advisory Committee on Packaging. This is an important body that represents most of the packaging chain.

My noble friend Lord Jenkin suggested that the Explanatory Memorandum accompanying the regulation did not provide an accurate summary of the consultation responses received, and that opposition to the plastics targets was not properly represented. The memorandum states that overall, taken as a whole, respondents to the consultation were supportive of increasing the targets. However, it acknowledged that there was some concern about the level of increase for certain materials, notably plastics. I ask my noble friend to accept that this reflected the fact that the plastics producers who opposed the preferred option on the grounds that it was unachievable represented between 10% and 15% of the total obligated tonnage for plastics. The majority of respondents who expressed a preference supported the higher targets; only a minority expressly opposed them.

5.30 pm

Lord Jenkin of Roding: Does the Minister think that the two trade associations whose representatives he met, the British Plastics Federation and the Packaging and Films Association, represent only a small part of the industry? That is not the impression they gave me.

Lord De Mauley: My Lords, the calculations I have been given indicate what I have just stated. Furthermore, I understand that there were opposing views even among the members of those associations who responded to the consultation. I do not argue with the fact that there has been opposition and that it is important to consider it. Indeed, I have and am considering it.

Lord Knight of Weymouth: I have a question about the Advisory Committee on Packaging. It used to be an arm’s-length body, but after the review it was taken into Defra. I think that this Committee would find it valuable to know what opposition was expressed within that committee. Is the Minister willing to publish the minutes of the advisory committee’s meetings to see how the debate was represented?

Lord De Mauley: If I may, I shall come to the advisory committee later in the debate.

My noble friend Lord Jenkin referred to his concerns about the achievability of the targets. I shall go into some detail on that because I think it will be helpful to noble Lords. The 42% recycling rate was consulted on and, as I said, the majority of the consultation responses supported the proposal. I acknowledge that the target is challenging and we will monitor progress closely, calling on the expertise of the Advisory Committee on Packaging. In responding to the consultation, waste companies, reprocessors and local authorities felt that the infrastructure was sufficient to deal with demand and that further infrastructure would come on stream by 2017 to cope with increased supply and demand—I think that that is the question to which the noble Lord, Lord Knight, referred. The quality of recyclates is also something that the Government take seriously.

20 Nov 2012 : Column GC173

My officials are working on an action plan, to which my noble friend referred, to address the quality of recyclates, and it will be published shortly.

I turn now to the targets themselves. As I say, it might be helpful to noble Lords if I go into a little detail on these. Defra has conducted a full analysis of how the targets can be achieved. As with any projections, assumptions have been made. That is why we exposed our analysis to scrutiny through public consultation and we asked industry if we had got it right. Most of the organisations that will be required to collect, sort and reprocess the additional material thought that the higher targets would be achievable. However, as we heard today, some in the plastics manufacturing industry remain concerned about the achievability of the plastics targets. Officials have met representatives of the industry and, as my noble friend said, I myself have met them. I have carefully reviewed the concerns raised and the evidence provided.

I will take the different targets in turn, starting with plastic bottles. The lion’s share of hitting this target will fall to bottle recycling. Good progress has been made, with the UK now recycling just over half of the bottles that are thrown away. However, around 240,000 tonnes of household plastic bottles that are disposed of in households with access to plastic bottle recycling collection points still end up in landfill. This makes no sense. The material has a value of at least £18 million. We must get it out of landfill and into recycling. This can be done relatively cheaply because the infrastructure is already in place. Nearly every local authority in the country is collecting bottles, while the sorting and reprocessing infrastructure is well established and the end markets are thriving. The key to capturing thousands more tonnes of plastic bottles is communication. I want to see industry and local authorities working together to communicate to the householder. For example, the plastics industry could follow the model adopted by the metal packaging and reprocessing industry under its “Metal Matters” campaign, which has increased householder participation in recycling schemes by up to 40%.

The other source of plastic packaging we expect to make a major contribution to achieving the targets is from the commercial and industrial sector. Our estimates suggest that a significant tonnage is currently being recycled but is not being counted by the PRN system. Indeed, in 2005 almost 350,000 tonnes of commercial and industrial plastic packaging was collected for recycling compared with apparently less than 280,000 tonnes in 2010. We believe that the disappearance of 70,000 tonnes was largely because there was no need for the material to be counted towards meeting the recycling targets, but that it actually continues to be recycled outside the PRN system.

Lord Jenkin of Roding: Does the Minister not recognise that with that additional amount put in, it will simply be a question of counting it? It will not get any more, because it is very nearly complete. A vast quantity of the commercial and industrial plastic weight is already being dealt with. Therefore, how can there possibly be a substantial amount still to go to meet the targets? I am sorry; the argument simply does not stand up.

20 Nov 2012 : Column GC174

Lord De Mauley: All I am suggesting is that, as a contributor to the target, there is 70,000 tonnes or thereabouts available which is not currently being counted.

Lord Jenkin of Roding: It is happening.

Lord De Mauley: It is happening, but it is not counted in the current targets: that is the point. Of course, we will need to look at other plastics streams.

Lord Jenkin of Roding: It is a mockery.

Lord De Mauley: This includes recycling more plastic pots, tubs and trays and more plastic films. We recognise that increasing the collection and recycling of these types of plastic represents a challenge, but we are seeing some encouraging trends. For example, in the past four years more than 100 local authorities have introduced collections for pots, tubs and trays. This has seen the recycling rate for these items more than treble over the past five years from 5% in 2008 to 18% now. To meet the proposed plastic recycling target we are looking for the recycling rate to increase from the current 18% to 28% over the next five years. There is also a range of planned waste policies that will encourage local authorities to collect a wider range of plastics for recycling. In particular, WRAP is investing £5 million, through its mixed plastics loan fund, by which it means to deliver, by 2015, a further 100,000 tonnes of recycled pots, tubs and trays—double the 50,000 tonnes we anticipate will be needed from this stream to meet the overall target.

Of course, the higher packaging recycling target being debated today will help provide extra stimulus for local authorities to roll out collections and for MRF operators to invest in new sorting technology to handle a wider range of plastics. Other waste policies will encourage greater collection of plastics. These include the landfill tax, which is set on an increasing scale, making disposal of these items less economically attractive, and the revised waste framework directive, with its focus on separate collection of plastics and other dry recyclates by 2015.

We recognise that there are concerns about infrastructure capacity. However, I understand that most new sorting facilities, or MRFs, are being designed to handle mixed plastics or will have suitable capacity to add additional materials at a later date to support changes to local authority collection services. Furthermore, the Environmental Services Association, the main trade body for waste management companies, has stated that there are plans for an additional 6.6 million tonnes of MRF capacity to come on stream between 2013 and 2017. On that basis, the 50,000 tonnes of additional plastic anticipated should be manageable.

My noble friend Lord Jenkin referred to glass and asked about meetings. There was recently a meeting with British Glass to discuss the targets for 2012. I am not aware of wider requests for meetings from the glass sector. It is important to recognise that the glass targets before your Lordships today are flat and only slightly above the minimum 60% necessary to achieve the target set in the EU directive.

20 Nov 2012 : Column GC175

I listened carefully to concerns about the costs of the new regulations on certain business sectors. I ask noble Lords to accept that this needs to be seen in the context of the overwhelming benefit to the economy as a whole, including the UK’s recycling and reprocessing industry. Most businesses on which the obligation to meet the proposed targets will fall are in favour of them. In setting them, we sought to balance the costs to businesses, and we did not increase them unless there was a sound business case for doing so.

My noble friend Lord Jenkin asked about exports. I am fully supportive of the need for a level playing field. As part of the ongoing review of the packaging regulations, we are exploring the issue and considering options for how it may be addressed. I believe that there is significant scope for growth in domestic demand for recovered plastic. Security of feedstock has been cited as discouraging some reprocessors from entering the market. We believe that the proposed targets will provide greater confidence in supply, plus the financial support to enable investment in increasing domestic reprocessing capacity.

My noble friend Lord Jenkin referred to the Advisory Committee on Packaging suggesting lower plastic targets in its report of work carried out in 2010-11. The ACP’s response to the consultations actually supported the Government’s preferred option of higher plastic packaging recycling targets. Its report of work in 2011-12, published earlier this year, confirmed its advice that the higher plastic packaging targets suggested by the Government would be achievable provided that there was an increase in the provision of collection infrastructure and that participation rates increased. Furthermore, more new infrastructure is, as I have said, coming on stream to cope with supply and demand.

My noble friends Lord Jenkin and Lord Lindsay asked for a mid-term formal review. I think that I can go further than that. I assure the Committee that my department will monitor progress throughout the period in question and will take appropriate action if needed. The ACP has a standing agenda item at its quarterly meeting to review packaging recycling achievement data and to advise Defra on trends and impacts on achievability going forward. I will keep a close eye on that. I am also happy, as my noble friend requested, for discussions to continue between those he represents and my officials.

My noble friend Lord Lindsay suggested—perhaps I am paraphrasing him unfairly—that Defra used its own evidence. Defra used a range of evidence sources, including WRAP research on collection costs, industry data on waste from groups such as PackFlow and the ACP, as well as evidence submitted as part of the consultation.

The Earl of Lindsay: My Lords, I will clarify what I said because the paraphrase did not quite catch the point that I was trying to make, which was that the evidence that the department used to underpin the regulations currently before us was not seen by key players in the industry until such a late stage of the process that, while they had reservations and doubts about some of it, there was no time to properly discuss it with the department before it became a fait accompli.

20 Nov 2012 : Column GC176

Lord De Mauley: I accept that, my Lords. I apologise to my noble friend. I hope that I have covered the point quite extensively in the debate.

The noble Lord, Lord Knight, asked what would happen beyond 2017. That is some way in the future. I am clearly not in a position to answer it now. It is one of the things that will be taken into account as we move forward. I referred to the review process that will be going on. I hope that that helps him.

The noble Lord asked for the publication of the ACP minutes. I would need to talk to the committee. Perhaps I cannot go quite so far as to commit to doing so in this Committee, but I will certainly look into the possibility. He also asked about the criteria used to set the different targets for different materials. There was a comprehensive cost-benefit analysis. If it would be helpful to noble Lords who have participated in the debate, I am happy to send them documentation to support that.

5.45 pm

To sum up, these regulations will allow the United Kingdom both to continue to meet its EU regulations and to achieve our ambition to increase recycling rates. They demonstrate that economic growth and improving the environment can go hand in hand. I recognise that some targets are more challenging than others, in particular the plastics targets. Decisions about the targets were based on the best available evidence and reflected consultation with key interests throughout the supply chain, but dialogue should not stop there. I assure noble Lords that my department will continue to monitor progress towards achieving the targets throughout the period in question and will be very open to discussion. We will maintain regular dialogue with the industry and others, and will take appropriate action if needed.

I hope that I have gone some way to allay the concerns of noble Lords, as well as assuring others of the Government’s intent to improve the UK’s performance on recycling. I will, of course, review the debate and write regarding any questions that I have not fully answered. For the reasons that I outlined, I believe that the targets are achievable and will support investment and growth in the UK’s recycling sector, which will be good for business and good for the environment.

Lord McAvoy: Before the noble Lord sits down, his noble friends Lord Lindsay and Lord Jenkin of Roding were quite critical of the civil servants in his department. Even my noble friend Lord Knight of Weymouth mentioned that Whitehall did not have all the answers, was not in total charge and did not hold the same sway that it had previously. Despite the Minister’s excellent job of answering all these questions, he did not fully answer the points about the behaviour of his department. I remind him that a former Conservative Prime Minister said that “advisers advise, Ministers decide”. How much responsibility do Ministers take for the behaviour that the two noble Lords criticised? I do not include the noble Lord because he was not there, but how much responsibility belongs to Ministers and the Government, rather than to civil servants who cannot answer for themselves?

20 Nov 2012 : Column GC177

Lord De Mauley: My Lords, I am responsible.

Motion agreed.

District Electoral Areas Commissioner (Northern Ireland) Order 2012

Considered in Grand Committee

5.48 pm

Moved By Baroness Randerson

That the Grand Committee do report to the House that it has considered the District Electoral Areas Commissioner (Northern Ireland) Order 2012.

Relevant document: 8th Report from the Joint Committee on Statutory Instruments

The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson): My Lords, I beg to move that the draft District Electoral Areas Commissioner (Northern Ireland) Order 2012, which was laid before the House on 15 October 2012, be approved. This is a relatively simple but important order that makes provision for the appointment of a district electoral areas commissioner in Northern Ireland. By way of background, local government itself, including local government boundaries, is a devolved matter for the Northern Ireland Executive, but elections to local government are an excepted matter for the UK Government. In 2008 a local government boundaries commissioner was appointed by the Northern Ireland Department of the Environment to make recommendations regarding the boundaries, names and wards of the new 11 local government districts, reducing the number from the current 26. Once established, the wards in those districts need grouping into electoral areas so that elections can take place using the STV form of proportional representation. The Secretary of State appoints a district electoral areas commissioner, who is independent of government, to carry out this important task.

In 2009, the then Secretary of State appointed Dick Mackenzie as the DEAC for a period of one year. This was done in the expectation that the Northern Ireland Executive would move forward with local government reorganisation in time to hold the 2011 local elections on the new 11-council model. Mr Mackenzie did a considerable amount of work on the district electoral areas during his period of appointment but unfortunately was not able to complete his task. This was because the Executive at that time were not able to move forward with the local government reorganisation before his term of office expired. It was of course not possible to set electoral areas before ward boundaries had been agreed. Local elections in 2011 were therefore held on the basis of the 26-council model.

I am delighted that the Northern Ireland Executive and the Northern Ireland Assembly have now agreed to move forward with local government reorganisation and that an order setting out the boundaries and wards for the 11 new councils has been agreed by the Northern Ireland Assembly. The order is expected to be made by the Northern Ireland Department of the Environment before the end of November.

20 Nov 2012 : Column GC178

As for the order itself, we now need to move forward with the next part of the process. Since the district electoral areas commissioner appointment has come to an end, there is no legal basis on which to reappoint someone to the same task, so a new order is needed. The order before us, in summary, makes provision for the appointment of a district electoral areas commissioner following the 2008 local government boundary review and amends the District Electoral Areas Commissioner (Northern Ireland) Order 1984.

Article 2 provides for the appointment of a replacement commissioner when the district electoral areas commissioner’s appointment has come to an end before he has completed his task. This provision will be used for the current process. Article 2 also makes amendments to the timing of future appointments, providing greater flexibility for the Secretary of State on when to make the appointments. It allows the Secretary of State to appoint a district electoral areas commissioner at any time after a local government boundaries commissioner’s appointment. However, he or she will not be required to do so until an order has been made by the Northern Ireland Executive establishing the new local government boundaries.

Article 3 makes specific provision for the timing of the appointment following the current review. It provides that the Secretary of State must appoint a replacement district electoral areas commissioner “as soon as practicable” after this order comes into force. It also provides that the commissioner must submit his report as soon as practicable after his appointment if the local government boundaries order is made before this order comes into force, which may well be the case.

In conclusion, I hope that noble Lords will endorse this statutory instrument, which ensures that the process of local government reorganisation in Northern Ireland, as agreed by the Assembly, can continue. I commend the District Electoral Areas Commissioner (Northern Ireland) Order 2012 to the Committee.

Lord McAvoy: My Lords, first, I welcome the noble Baroness, Lady Randerson, to the post dealing with Northern Ireland. As I am sure she will pick up very quickly, boundaries are of great interest to all political parties in Northern Ireland, perhaps even more so than in the rest of the United Kingdom. I am not quite sure whether she is a veteran of the debates on the Parliamentary Voting System and Constituencies Bill but that was certainly a very interesting time and I thoroughly enjoyed my part in it.

Can the Minister tell us whether there have been any objections to the delay in making this appointment and putting this order through, and whether there were any objections to any part of the process? We take the view—and my honourable friend Vernon Coaker has always made it quite plain—that these matters that are devolved to Northern Ireland must be dealt with in Northern Ireland. Especially when it comes to boundaries, we will work closely with all the parties in Northern Ireland to make sure that they are accepted.

However, there are one or two questions. This post is likely to be controversial and I wonder what the Government’s response is to any controversy that has

20 Nov 2012 : Column GC179

arisen over this post, which is quite a significant one. Perhaps the Minister can answer those questions when she responds. I reserve the right to perhaps come in again if any comments require a response from me.

Lord Kilclooney: My Lords, I welcome the order and will certainly not be speaking at any considerable length on the subject. However, I am greatly encouraged that the Minister thinks that local government reform in Northern Ireland is “relatively simple”, which I think was her opening phrase. As a Minister in 1972 introducing the reform of local government in Northern Ireland, I did not find it relatively simple—it was very controversial indeed. It is nice to know that after 40 years what I did at that time has existed with some success. It is even nicer to find that it is considered to be a relatively simple affair in Northern Ireland today, although I think that the noble Lord who has just spoken was hinting that it can also be controversial in Northern Ireland.

It is a difficult subject for the Committee. As the Minister said, some of the items are really for the devolved institutions and some are for our national Parliament here in Westminster. I am wondering what speed we are going to work at. We were to have a local government election in 2011, but that has been extended because the boundaries were not agreed. Have we got a target date now for the next local elections or has it simply been extended without a target date? There needs to be clarification, not just for the Committee but for the public generally in Northern Ireland, as to where we are going and at what speed. I notice in the order, for example, that the district electoral area commissioner will be appointed “as soon as practicable”. What does that really mean? How soon will it be? It is time that we moved ahead with local government reform in Northern Ireland.

I personally welcome the idea of the 26 councils in Northern Ireland, which I introduced in 1972, being reduced to 11. That itself is a controversial subject in Northern Ireland, even within some of the political parties, never mind among them. You can never please everyone. For example, in my former constituency of Strangford, the borough of Castlereagh is now being linked in many respects with the borough of Lisburn. I find that very difficult to understand but accept the recommendation that there should be 11 councils in Northern Ireland.

Within each council area—here we are talking about boundaries and the number of councillors—I assume that there will be a councillor for each ward. We are discussing the joining together of various wards in an electoral area. If three wards are joined together, I assume that there will be three councillors. If four wards are joined together, I assume that there will be four councillors. I hope that that will be clarified. Will there be a minimum number of wards that can be joined together, and a maximum number? For example, if a new council boundary encloses 11 wards, is it possible that all 11 wards will be in one district electoral area? I would not have thought so; there must be a minimum and maximum, and I would like to know what they are.

20 Nov 2012 : Column GC180

Otherwise, I have no objections to the order. It is the way forward for Northern Ireland. Some of the councils in Northern Ireland are ridiculously small in population, yet have the same powers as some of the very large district councils. It is good to see this reorganisation, I wish it godspeed and I look forward to the Minister’s reply.

6 pm

Lord Empey: My Lords, as the noble Lord, Lord Kilclooney, said, the statutory instrument before us is fairly straightforward. However, it would not be possible for me not to comment on its timing because of the delay that has taken place. This phase of local government reform began in 2001, when the first Executive decided to reform local government. I welcome the Minister to her new duties. She is a former devolved Minister in Wales. I am a lifelong supporter of devolution, but I have to say that the performance of devolution in the area of local government has not been its finest hour.

We started this in 2001. Of course, the Executive ceased in 2002 when direct rule came back in. I think that it was Secretary of State Hain who, in a blaze of glory, announced his proposals for the reform of local government, with a proposal for seven councils. Then devolution came back in and the then Executive did not agree with that. We proceeded to a new process and Mr Mackenzie was appointed in 2008. He made his final report on 22 June 2009, which is getting on for three and a half years ago. The last we heard, local government elections were to be held for shadow councils in 2014, but these would not take power until 2015.

By any stretch of the imagination, that is not a good timetable. The effect has been to leave local councils in some cases without chief executives, and not knowing whether they are coming or going. The powers that they were to get, which started off substantial but are very small in the current process, have gradually eroded. There has been a lot of confusion, and councils have had acting chief executives and various other things, so it has not been a happy time.

On the timing of the order, I, too, would be interested to know when the commissioner will be appointed. A significant process will have to take place. When the wards are grouped together to form district electoral areas, I understand that current legislation will permit either five or seven to be allowed for. The noble Lord, Lord Kilclooney, who occupied a place in local government, will know that most local government districts had five, six or seven councillors.

I do not know whether that will be amended, but when the draft boundaries come out, they will have to be subject to public consultation. The commissioner has to take evidence and seek public comment, so even if the person were to be appointed this side of Christmas, it is inconceivable that the report would be ready by the summer of next year. If the local elections were to be held in 2014 to coincide with the European elections, that leaves the political parties very little time to select their candidates and get things sorted out. I would be very interested to hear the answer to that question.

20 Nov 2012 : Column GC181

While it is not strictly relevant to this order, the Minister referred to local government, of which I have had some experience. The fact is that a lot of good work has been done there. It kept democracy alive in the dark days when there was no alternative to local government. Councillors have actually made the supreme sacrifice for their participation in local government. They have been attacked and assassinated, and sadly that still continues. Councillors take a risk, so we would all wish to commend them on their efforts in trying to maintain the democratic process.

I am very disappointed so far as the 11-area model is concerned and some of the proposals are barking mad. Indeed, it is the only proposal for local government that I can recall where the participants, the people and indeed the commissioner were legally prohibited from taking into account local identity, which is the whole purpose of local government. To say that the commissioner was prohibited from drawing up the boundaries and taking into consideration local identity seems most bizarre.

So far as the proposal for the city of Belfast is concerned, in my opinion it is nothing short of a gerrymander, and I deeply regret that. Nevertheless, the proposal is here and I think it has to be proceeded with. But perhaps I may make a comment to the noble Lord, Lord McAvoy, in response to what he said about boundaries being problematical in Northern Ireland. Of course they can be problematical, but when I came into your Lordships’ House not very long ago, we were debating the constituencies Bill. If he thinks that boundaries do not matter in here, I can assure him that when boundaries were being discussed then, what I saw looked like hungry dogs fighting over a bone. The matter was being discussed with passion at that stage. I think the noble Lord will find that when boundaries and people’s constituencies were being discussed in your Lordships’ House, it was evident to me that it mattered.

Lord McAvoy: I agree with my noble friend for the purposes of this debate. “Mad dog” is perhaps the best description of me when it comes to the towns of Rutherglen and Cambuslang being incorporated into a Glasgow constituency. He has mentioned the boundaries—

The Deputy Chairman of Committees (Lord Colwyn): I think that the noble Lord should not make another speech at this stage. Perhaps we could hear from other speakers and then from the Minister. He can interrupt on points of clarification then. It is not correct to speak twice in these debates.

Lord Empey: My Lords, I note what the noble Lord, Lord McAvoy, says, but the lesson is that wherever you are in the United Kingdom, boundaries matter. As the noble Lord, Lord Kilclooney, said, it is encouraging that we can have a debate and discuss these issues in Northern Ireland without, thank God, the consequences that once might have been the case. It is a more mature discussion. While I have big problems with what is being proposed, decisions have been taken and they must be respected. This order is the natural outcome of those proposals.

20 Nov 2012 : Column GC182

Perhaps the Minister will give us some idea of the timing. Of course, the Northern Ireland Office can only respond to the devolved Administration—it cannot initiate the process; it has to wait—but if elections are to take place in 2014 as apparently proposed, the timetable for this operation is vital. If the appointment is made shortly, it will be the middle of next year before any proposal can be implemented. That is leaving things very short. This process has gone on since 2001. When those new local councils take power in 2015 it will have taken 14 years to reform local government for 1.8 million people.

You could not make it up if it was anywhere else in the world—and we are supposed to be lecturing people on the democratic process and how they conduct themselves. In fact, we have been so slow with this that the whole scene in local government will be out of date before we get it going. If this commissioner is not able to do his or her work in the first half of next year, the opportunity to hold those local elections will have been lost, and they will be postponed once again. I, too, would be interested to hear the Minister’s response.

Lord Browne of Belmont: My Lords, I welcome the order. It is important that the commissioner is in place as soon as possible, to move forward quickly and to have the mechanism to allow the establishment of the 11 new councils and, particularly, to group the new wards in the appropriate councils. The 11 new councils will be more efficient and cost-effective, and prove better value for the rate-payers of Northern Ireland. However, like the noble Lord, Lord Empey, I am concerned about the timeframe. Is the Minister satisfied that the timeframe that will be afforded to the commissioner will be sufficient to allow local elections to proceed in 2014? Finally, is any appeal process available to those who object to the commissioner’s findings?

Lord Morrow: My Lords, I will make a few remarks on the reform of local government. As one who has been in local government from 1973 to the present day, what strikes me is that when local government was first reformed under the recommendations of the Macrory report—I heard what the noble Lord, Lord Kilclooney, said: that this happened under his watch—it was a straight-across change. There were no shadow councils put in place then. It was one way today and a different way tomorrow; that was just the way it happened. There was no learning process, there was no settling in and there was no getting to know the ropes. You just landed on your feet; at least, that is the way that I had to do it. I suspect that no one else did any differently.

We had an election in 2011. I think it has been implied that there was no election then. Well, I stood in an election in 2011 so there was one, and there is another now proposed for 2014. Generally, I support the principles of what has been outlined here today. We have 26 district councils. I am not going to comment on whether they have been good, bad or indifferent. There have been deficiencies, all right. However, I agree with noble Lords when they say that it was the only form of government, of elected representation, there for some 40 years. It is right that we should pay

20 Nov 2012 : Column GC183

tribute to those who unfortunately had to pay the ultimate sacrifice, for whatever reason. Indeed, some are being asked to do that to this very day.

If we are going to reform local government, and it has taken some time to bring it to this stage, we would do better to get it right than to do it quickly. I do not think that we in Northern Ireland could ever be accused of doing anything too quickly. We take an inordinate amount of time going through this process, but it is an important process for a number of reasons. I support the concept of 11 councils. Quite frankly, Northern Ireland is much too small to have 26 district councils, 108 MLAs, 18 MPs and three MEPs. We are oversubscribed in relation to public representatives, and it is right that change should come quickly.

Having made those observations, I generally and basically agree with what is outlined here today.

6.15 pm

Baroness Randerson: My Lords, this has been a very interesting debate and I thank all noble Lords who have contributed to it. Some very important points have been made. I will do my best to reply to all the substantive issues that have been raised but will of course review the record afterwards and write to noble Lords if I feel I have not had the opportunity to do so.

The noble Lord, Lord McAvoy, asked whether there had been any objections to the delay in laying the order or to any part of the process. Of course, the timing of this is entirely a result of the processes followed by the devolved Administration—the Assembly and the Northern Ireland Executive—and it is for them to choose the speed at which we travel. We have responded to their work in the most timely manner possible but the timescale is a result of their discussions and deliberations. To our knowledge, there have been no objections to the role of the Northern Ireland Office in this matter, although there has been considerable debate, some of which has been reflected here today, on the nature of the boundaries and precisely what they should be.

The noble Lord, Lord Kilclooney, set out for us the road that has been travelled in Northern Ireland and it is important that we bear in mind when we discuss issues such as timing and delay that we have travelled a very long and significant road. He is right to point out that there are still considerable sensitivities surrounding these issues.

On the future speed of travel, the target date is that the Northern Ireland Executive hope to hold the next elections, for a shadow set of 11 authorities, in 2014. Noble Lords will be aware that the 2011 elections were held on the old boundaries, for the 26 authorities. If we are to have the new boundaries in place and shadow elections in 2014 for councils that will come into their full powers in 2015, the DEAC needs to do his or her work in time for those elections, and for the setting up and selection of candidates and the role that political parties have to play in all this. The Northern Ireland Executive are ambitious to achieve this timetable and we are anxious to support and enable them to do so.

20 Nov 2012 : Column GC184

The noble Lord also asked about the size of the districts. The 1984 order set out a five-to-seven-ward model, with each ward represented by one councillor. If you have a district of five wards, you have five councillors and if you have a district of seven wards, you have seven councillors. It would seem that this is the likely model that will be followed in future.

The noble Lord, Lord Empey, also expressed concern about the delay in the local government elections, particularly the impact that this delay and uncertainty has had on local councils. He rightly points out the important role of councils in maintaining democracy in Northern Ireland, even at the most difficult times. Councils in Northern Ireland should be commended for that role. He is also absolutely correct in pointing out that time is short if there are to be elections to the shadow councils in 2014. It might help if I point out that the DEAC’s work and the process to be gone through will include a public consultation and potentially 11 separate inquiries—one for each of the new council areas. Once the DEAC has been appointed, it may take up to a year to complete this work. Therefore, I agree that the appointment needs to be done promptly, although there is scope to reduce that time if the uncompleted work of the previous DEAC could be utilised, at least in part. We are clear that the work needs to be completed as soon as possible; certainly in good time for the scheduled elections.

Lord Empey: To be clear, if the former commissioner happened to be reappointed, I can see how one could compress that. However, if there is an appointment process, someone else is appointed and that takes a year, are we saying that parties would have only three or four months to react and for candidates to come into the picture? All that would have to be done. That is a ridiculously short amount of time. I could argue that it is nearly worse than police and crime commissioners.

Baroness Randerson: I must agree with the noble Lord that time is short. The timescale can only be met with the goodwill and support of the political parties. Of course, once the DEAC is appointed and the inquiries start, it will come as no surprise to local political parties that the elections are on the horizon, so it may be possible for them to prepare in advance. The noble Lord is right to say that the targets here are ambitious, but I emphasise that they are not set down by the Northern Ireland Office. We are following the timescales set by the Executive in Northern Ireland and we are anxious to support them in their ambition to introduce reforms in local government in time for 2015, when councils have their powers fully conferred on them.

We accept that our success in this depends on joint work with the Northern Ireland Executive. We are working closely with them. Our role is to make arrangements on the election administration and the Executive will need to bring in legislation on the operation of the shadow councils.

I referred to the process that the DEAC will have to fulfil in order to achieve his or her work. I emphasise that the work of deciding electoral areas is of fundamental importance to the election process. Although timescales

20 Nov 2012 : Column GC185

may be tight, it is important, for reasons that have been amply illustrated today, that the work should be done carefully, fully and correctly, because it is potentially controversial.

The noble Lord, Lord Empey, addressed the proposals on boundaries and the apparent prohibition on taking into account local identity. This is a matter for the Northern Ireland Executive. The issues are devolved and it would be entirely wrong for me to intrude on them in my response.

The noble Lords, Lord Browne and Lord Morrow, both stressed their support for the new model of 11 local councils. It is important that we emphasise that across the piece there has been support for local democracy in Northern Ireland, and for the new model. I assure noble Lords that the Northern Ireland Office will do everything it can to help the Northern Ireland Executive move forward.

Any local government reorganisation in any part of the United Kingdom is a sensitive issue. I speak as someone who went through it once as a local councillor. The issue cannot be rushed. It is important for strengthening democracy, and this is an important part of strengthening Northern Ireland and its democratic future.

Motion agreed.

Child Support Management of Payments and Arrears (Amendment) Regulations 2012

Considered in Grand Committee

6.31 pm

Moved By Baroness Stowell of Beeston

That the Grand Committee do report to the House that it has considered the Child Support Management of Payments and Arrears (Amendment) Regulations 2012.

Relevant document: 8th Report from the Joint Committee on Statutory Instruments.

Baroness Stowell of Beeston: My Lords, these regulations were laid before both Houses on 15 October and will implement powers inserted into the Child Support Act 1991 by the Child Maintenance and Other Payments Act 2008, which was introduced by the previous Administration. A correction slip was published on 5 November, but the change was purely technical to correct a simple typing error in draft Regulation 3 concerning the amendment to the Child Support Information Regulations 2008.

I shall move on to the detail of the regulations in a moment, but first I will assure the Committee that the Government are determined to get to grips with the long-standing issue of child maintenance arrears. More and more parents are paying child maintenance, but we must ensure that those who do not are compelled to meet their financial responsibilities for their children and pay what they owe. To this end, we will shortly

20 Nov 2012 : Column GC186

publish an arrears strategy, setting out our approach to preventing their accumulation and to collecting and enforcing them in future.

There are, however, some cases where child maintenance arrears are very unlikely ever to be collected in full, where we have no legal power to enforce them, or where they are no longer wanted by the parent with care. It is only these cases that the regulations we are debating today look to address. The regulations provide the ability for the department to accept a part payment in satisfaction of a child maintenance debt in full. When these regulations are introduced, the department will use them only in response to part-payment offers received from clients and will not take a proactive approach. Only once we are satisfied that we have a robust process in place will we consider how and when a proactive approach could be taken.

Where the department has exhausted all appropriate enforcement measures but has been unable to enforce the full amount owed, and where both parties are in agreement to a lesser amount being paid, this power will enable the department to bring cases to an acceptable resolution for clients. It is intended that the ability to accept such lower amounts will enable money to flow to children in cases where it may otherwise not have done and incentivise non-resident parents to come to agreements in respect of their arrears. As part of maintaining this principle of providing a real incentive for non-resident parents to pay, where a part-payment offer is made and the non-resident parent pays maintenance to more than one parent with care, they will have the ability to specify which parent they want the money paid to.

In plain English, what that means is that if the non-resident parent—for these purposes, let us assume that it is a man—is paying maintenance to two different parents with care—for these purposes, let us assume that they are both women—he will be able to choose which mother and child he makes the part payment to. However, I shall come on to a very important point about any parents to whom a part payment is not made. We will be clear with the non-resident parent that the arrears will remain owed in full and will be subject to enforcement. To make that absolutely clear, if a part payment is made to one parent with care—one woman—and there is another woman to whom the non-resident parent is paying maintenance, the other woman will not be in any way affected by this decision.

Where a part-payment offer is made, the department will consider on a case by case basis whether the offer made by the non-resident parent is reasonable, taking into account the probability of collecting all the arrears due and the non-resident parent’s employment status and income. The department will also obtain written consent from the parent with care in every case and will not accept any part-payment offer to which they have not given their explicit consent. So if the parent with care does not agree, it will not be forced upon them. This will continue to be the case if, in future, a more proactive approach is taken by the department in relation to part payment.

When the part-payment powers are introduced, they will only allow part payments to be made by non-resident parents in one lump sum. However, following

20 Nov 2012 : Column GC187

the views of stakeholders in response to the public consultation, the department will introduce further regulations in future that will allow part payments to be made by instalments, once the required system changes have been made to accommodate them.

Moving on, the regulations also provide the power to write off some arrears of child maintenance, but only in the explicit circumstances set out in the draft regulations. The provisions of the 2008 Act limit those regulations to circumstances where it would be “unfair or otherwise inappropriate” to pursue enforcement of the arrears. An example of where arrears can be written off under these regulations is where the parent with care has explicitly informed the department that they do not want the arrears collected. Where this is the case, the department will ask the parent with care to confirm this in writing and ensure that it provides all the information necessary to enable them to make a fully informed decision.

In other circumstances covered by the regulations, such as where the non-resident parent has died and we cannot recover from their estate, there is no way of ever collecting the arrears. In such cases, where the arrears will never be collected, it is not sensible to allow them to remain outstanding. It is better to be open and transparent and write off the arrears. Where the department is considering writing off arrears it will inform both clients of this if they are still alive and, where appropriate, will give them 30 days to make representations. As my honourable friend pointed out in the other place, this period has been extended from 14 days following responses received to the public consultation on these regulations.

The department will then consider those representations and inform both clients of the decision on whether to write off the arrears. Cases will always be considered on their own merits and the views and information provided by clients will always be taken into account. All arrears written off under the write-off and part-payment powers will be carefully and fully recorded. Clients will be kept informed of what is happening in their case and why. Where appropriate, their consent will always be sought.

In summary, these powers are intended to address a minority of cases. They will be used only where the department is unlikely ever to collect the arrears in full, where all enforcement measures have either been exhausted or are not appropriate, and where clients have either been informed or, where appropriate, have given their consent. The department will continue to collect arrears whenever a parent with care wishes and it is appropriate and possible to do so.

I am satisfied that this statutory instrument is compatible with the European Convention on Human Rights, and I commend it to the Committee.

Lord McKenzie of Luton: My Lords, I thank the Minister for introducing these regulations in a comprehensive way. As she said, they derive from the provisions of the Child Maintenance and Other Payments Acts 2008. It was legislation of the previous Government, so we clearly support its thrust and that of the regulations. Incidentally, the “Other Payments” bit of the Act, as

20 Nov 2012 : Column GC188

the noble Lord, Lord Kirkwood, will remember, was the no-fault scheme of compensation for sufferers of mesothelioma.

We have a few questions. One was prompted in particular by the Minister’s introduction, when she referred to the arrears strategy that will be published shortly. Can she give us a rough idea of what “shortly” means?

On the write-off of arrears, the Minister in the other place was clear, as was the noble Baroness, that the intent was that the power would be used only where the arrears were no longer wanted or where there was no legal way of enforcing the arrears owed. As example of the latter circumstance, the Minister instanced the PWC or NRP having died, or there having been an interim maintenance assessment. We have no questions on interim assessments, which were a mechanism designed to get some sort of payments out of non-resident parents who were not co-operating with the system. However, the new regulations also include circumstances, at paragraph 13G(f), where,

“the non-resident parent has been informed by the Secretary of State that no further action would ever be undertaken to recover those arrears”.

I am unclear whether this a separate circumstance rather than just an administrative requirement of the others. If it is not, what are the circumstances in which that would apply?

The death of the PWC raises the question—I cannot remember the answer although I asked it in the past—of whether the debt due from the non-resident parent is technically a debt due to the parent with care or to the CSA, or CMEC as it is now, which has a corresponding liability to the PWC. If the latter, is there any reason why it should die with the PWC? Even if the former, would it not be an asset of the estate—to the extent that it is collectable, of course? Presumably, if someone else takes on responsibility for caring for the child when the PWC dies, a new child maintenance assessment is potentially in point, unless a voluntary arrangement can be agreed. A similar power—which was referred to—applies when the NRP died before 25 January 2010, or where there is no further action which can be taken with regard to the NRP’s estate.

I presume that the January 2010 date is the relevant date under Section 43A, which was introduced to enable recovery from a deceased person’s estate. Will the Minister remind us of the status of such debts when the estate has insufficient funds to meet all outstanding debts and obligations? What will be the approach to compromising, or otherwise, on that which is owed under child maintenance arrangements? Before accepting part payment it is obviously important that the full rigour of the enforcement procedures available has been deployed. Doubtless the Minister will be aware of the considerable range of powers in the 2008 legislation. These include disqualification from holding or obtaining travel authorisation, curfew orders and disqualification from driving. Can we have an update on which of Sections 20 to 30 of the 2008 Act have been brought into force and when any remaining provisions are to commence?

20 Nov 2012 : Column GC189

Where part payment of arrears is to be accepted, whether or not appropriate consent is required, as I understand it, depends on the extent, if at all, that the amounts are due to the Secretary of State or to the PWC. It reasonably follows that where the amount of any payment is due to the Secretary of State—presumably for benefit recovery—then appropriate consent is not required for accepting a smaller sum in settlement. Will the Minister explain what safeguards are to be in the system to prevent any amounts being accepted as part payment in such a way as to leave the amounts which are collected due to, or disproportionately due to, the Secretary of State? If it is accepted that there must be a written agreement involving the PWC, what guidance and support will be available for them to make a judgment in these matters? Will amounts accepted in part payment always maximise the amounts due to the PWC, with the Secretary of State picking up any residue? Is there scope for the NRP to disagree with any allocation between the Secretary of State and the parent with care?

These regulations will presumably be applicable to the charging regime in due course. Again, what safeguards will be in the system to prioritise moneys for the PWC? As discussed in another place, the Explanatory Note envisages acceptance of part payment being by way of a lump sum—the noble Baroness referred to this in her introduction. However, it has been accepted that the primary legislation does not limit arrangements to lump sums. Nor, it would seem, does the order. The noble Baroness referred to bringing forward further regulations in due course. I am not clear, from these regulations, why that would be necessary and why the regulations cannot operate to cover a series of payments when the systems can cope with it.

If it is the intention to limit settlements to lump sums, this would appear to be a more limiting facility than is necessary. Would it not be the case that more NRPs are likely to be able to enter into some form of settlement if there were some prospect of spreading payments than if the compromise could only be by way of a lump sum? Indeed, it begs the question: if the NRP can make a payment in settlement of the arrears, what is defective in the enforcement powers that otherwise prevents these sums from being collected in the normal way?

We have followed the exchanges in another place concerning circumstances where the NRP may be obligated to make maintenance payments in respect of children in more than one family. Giving the NRP the right to allocate any settlement moneys is not an easy matter, but we see the thrust of the Government’s position on that, particularly as reinforced by the Minister’s comments in respect of the other parent whose arrears remain fully due and collectable.

As I said, we support the regulations. We are aware that they could be applied in a positive way to help move more money quickly for more children, but also in a negative way—the latter to avoid the grind of using to the full the extensive enforcement powers, with the temptation offered to PWCs to have the promise of some early money even if it is not their full entitlement. However, we note the assurances given by the Minister in the other place that the Government

20 Nov 2012 : Column GC190

will only be reactive in the initial stages of using these powers, which again was reinforced by the Minister this afternoon. Nevertheless, when considering an offer from an NRP, what kind of assurances will be sought concerning full disclosure of the NRP’s current financial status? All in all, we are prepared to give the Government the benefit of the doubt, but we seek assurances on the monitoring of these provisions and regular reporting to Parliament.

6.45 pm

Lord Kirkwood of Kirkhope: My Lords, it is a pleasure to follow the noble Lord, Lord McKenzie, on this important set of regulations. I should say at the outset that, like him, I have no objections to the technical provisions therein contained. I recognise the genuine progress that the Child Maintenance and Enforcement Commission in the current set-up, which will eventually morph into the Child Maintenance Service, has made in some areas over recent years.

That does not deny that a huge amount of work is now going to unfold, starting from next year with the closing down of all existing CSA cases. The department has the job of getting to grips with the mountains of child maintenance debt that have accumulated over the past 19 years. It is reassuring to hear the Minister say that we will soon be able to see the child maintenance arrears strategy. It was supposed to be published by the end of this calendar year, so I hope that we will still see it within that timeframe. Although the regulations are important, they are relatively small scale compared to the longer-term problems that we may face.

Like the noble Lord, Lord McKenzie, I have a list of elucidatory questions to ask. I do not think that it will be possible for the Minister sensibly to answer them all in the time available this evening, so I am perfectly happy to take some written guidance if that is found to be convenient to the Committee and the Minister. Although the regulations are important, they merely tidy up some peripheral areas. However, the context behind the whole policy or subject area is complicated and concerning and it bears some examination before we approve the regulations.

I start with the position taken by the Comptroller and Auditor-General on the last client fund accounts published by the Child Maintenance and Enforcement Commission. I accept that they are historic; the last audited figures we have are for 2008-09 and 2009-10. These suggest that at 31 March 2010 the commission regarded that total maintenance arrears amounted to £3.7 billion, and I believe that that figure will have increased by now. At that stage the commission took the view that only 28% of it was potentially collectable. That is just about £1 billion, and of that only about £0.5 billion, 13% of the total reported arrears, was likely to be collected. That is the size of the mountain we are setting out to climb next year, and we know that it is against a background of inaccurate maintenance assessments, processing errors, overstatements and understatements in the reported accounts, the arrears being available only at financial statement level, not at the individual case level, and arrears collection targets consistently missed year after year, year in, year out.

20 Nov 2012 : Column GC191

On the basis of the information presented in the last audited client fund accounts, the Auditor-General concluded that,

“the scale, age and collectability of the outstanding maintenance balances which have accumulated since the inception of the statutory child maintenance schemes, mean that the Commission continues to face a significant challenge to collect a large proportion of these arrears”.

That continues to be the case. The regulations we are discussing are a constructive step forward, but only a small step.

The Public Accounts Committee, responding to the opinion of the Comptroller and Auditor-General, took the view that the department had to do more to communicate positively and constructively with the parents involved, particularly the parents with care. In the Government’s response to the PAC’s conclusions, they said they would make a determined attempt to collect the £2.7 billion deemed, according to the C&AG’s report, not to be collectable. They would do that by undertaking a trial with a small number of clients to try and improve communication with parents with care to keep them au fait with what is happening in their individual cases. I understand that this trial has started. It would be of great benefit to us all to learn more about it. I think it started in June. I would like to know how many cases it has covered and whether there has been any evaluation of its success in terms of improving communication.

The work has significance for the future prospects of collection in the longer term and I would certainly like an assurance that when it is completed it will be published in full so we can see exactly what difference it can make by notifying parents of what action is planned to recover the sums owing to them. It should also tell customers of any debt it believes is too costly to pursue rather than leaving parents in limbo, which has been the case in the past. The DWP and new Child Maintenance Service understand that we need to work harder to make sure that the unvarnished truth is made available at every opportunity to the parents with care. If we had some assurances about that and the pilot scheme works well, then I hope we will seize the opportunity to make improvements in that direction.

I have a couple of other questions and, again, a written response is perfectly acceptable because some of these things get quite complicated. I want to ask about the validation of cases. When the CSA closes down a case, the DWP always separately undertakes a validation of the debt before it is transferred. I understand that only validated CSA arrears will be transferred into the new IT system; that is, those amounts that have been properly validated. In passing, I hear that the computer system being used at the moment is incapable of fully dealing with part payments. That may be a temporary situation, but if it is true, there is a long history, which I remember as well as anybody, of glitches in IT systems costing the system dear and contributing to accumulating arrears. If the new IT system is fully capable of taking part payments, particularly if they are used extensively in the future, that would be good.

20 Nov 2012 : Column GC192

However, we have a validation system which will almost inevitably mean that the number of individual cases will be reduced. I would like a reassurance that if and when that happens, there will be a full exchange with the parents with care as to what has happened, what the write-off has been, and a full explanation of the validation process and how it will affect their casework. These draft regulations provide for an arrears write-off, as the Minister has said, where a parent with care no longer wants the arrears. As part of the case closure process, will parents with care be asked whether they still want the arrears and, if so, at what stage? I would like to understand better the validation process as applied to these regulations, how it will be handled and how this work will unfold during the case closure process.

I turn briefly to the deprioritisation of older cases. It is stated Government policy, and the new Child Maintenance Service has made it explicitly clear in a way that has caused a great deal of concern, that the existing arrears in older cases—cases that are out of payment because the children are beyond the age of minority or have gone on to university—will not get the same priority to be chased down as those of parents with care for children who are of the age group which is currently eligible to accrue payments from non-resident parents. I have real concerns about this. This issue obviously goes wider than these regulations. I shall lay down a marker that when the Child Maintenance Service arrears strategy is published in full later in the year or whenever it comes, I hope that serious consideration will be given to what steps will taken. If older cases are not prioritised, what will happen to them? They cannot just be left because that is an abrogation of responsibility by the department and the Child Maintenance Service. It is effectively giving a green light to non-resident parents who have successfully evaded their responsibilities so far. That needs further and better consideration.

Penultimately, I raise the question of compensation. There will be some cases in these regulations where there will be a prima facie case where maladministration within the CSA or CMEC in the past has demonstrably led to arrears being greater than they normally would have been. I do not know exactly what the policy is at the moment but in the intimation of any such set of circumstances where the arrears are judged to be no longer collectable and there is a bona fide case to be made that the Child Support Agency contributed to that, compensation should be offered. We should be clear about what those compensation details are for the cases that they affect. They will not only affect these regulations, but the whole childcare arrears strategy in the longer term.

Finally, under the new statutory child maintenance schemes, cases will be admitted to the new child maintenance collection service only once a direct payment arrangement has actually broken down. That means that all the new cases that are assumed will come with arrears. The future strategy that is yet to be published needs to take a clear hold of that and deal with it, otherwise, we will end up in five or 10 years’ time dealing with new cases with uncollected arrears. If that was allowed to happen, we would not have learnt

20 Nov 2012 : Column GC193

the lessons of the past. That would be very disappointing and regrettable. What I am really asking for—as did, I think, the noble Lord, Lord McKenzie—is an early clarification of some of the wider policy intentions of the Child Maintenance Service in relation to outstanding arrears.

We will monitor these regulations carefully. The questions the noble Lord, Lord McKenzie, and I have raised deserve some response, but I am content to rest on what has been suggested and watch the future policy roll out. The Government can be sure that we will be watching very carefully to see whether these regulations are implemented properly and effectively so that child maintenance flows to the children that it seeks to serve.

7 pm

Baroness Stowell of Beeston: My Lords, I am very grateful for the support I have received from the noble Lords, Lord McKenzie and Lord Kirkwood. I will endeavour to respond to the various detailed questions that have been put. I note the generous offer made by the noble Lord, Lord Kirkwood, that he will accept responses in writing to any questions that I am not able to address today. Of course, if that is necessary, I will ensure that I follow up in that way, although I hope that I can get through most of the points raised.

To try to make this manageable—for myself if no one else—I will take this in three chunks. I will start with what I would categorise as general queries, then move on to the small number of points made on the write-off part of the regulations, and finally I will deal with part-payment, on which I think most of the points were raised.

On the general questions, both noble Lords asked about the new arrears strategy. I can confirm that that will be published shortly and certainly in line with the deadline that the noble Lord, Lord Kirkwood, mentioned, which was this side of Christmas. The noble Lord, Lord McKenzie, asked about the commencement of the full range of enforcement provided for in previous Acts. As I think I have made clear, our primary focus is the delivery of the new scheme. We will consider what additional enforcement powers should be brought into effect after the new scheme is introduced. We have introduced deduction orders and are using them widely, so they are already in operation.

The noble Lord, Lord Kirkwood, asked how the exploration of a new means of reporting arrears was going—apparently a previous Minister referred to this. Following the recommendation of the independent arrears panel, we have begun a trial of the reclassification of arrears, based on an approach undertaken in Australia. This trial is still under way but once it is complete and we have undertaken a full evaluation of its results, the department will take a view as to whether the approach should be rolled out across the case load. That is something that is still ongoing.

I am new to the DWP but I am getting the impression that IT is a general theme, so I have put it under “general issues”. The noble Lord, Lord Kirkwood, asked whether the computer system can cope with part-payment. The answer is: yes, but not part-payment

20 Nov 2012 : Column GC194

by instalments yet, hence the system changes that we are making. That is something that we acknowledge but are dealing with.

I will move on to write-off, although there are some things that I want to come back to. The noble Lord, Lord McKenzie, asked about the date under Section 43A and the deceased’s estate where a non-resident parent has died before January 2010. This is the coming into force date of the powers relating to recovery from a deceased’s estate. I apologise but I cannot quite remember the question the noble Lord put to me.

Lord McKenzie of Luton: I think that the noble Baroness has answered the question. Could she just confirm that that is the date from which recovery could be made against a deceased person’s estate? Prior to the 2008 Act, there was no facility for that. I seek confirmation only because it is the first time I have seen the date.

Baroness Stowell of Beeston: Yes, it is the coming into force date of the recovery from the deceased estate powers.

The noble Lord, Lord McKenzie, asked whether debt is due to the parent with care or to CMEC or the CSA, or should a debt die with the parent with care. The debt is due to the parent with care. Where the parent with care has died, we will try to find the executor of the estate, who may have an entitlement to the money. If we cannot find the executor, the debt cannot be collected. The reason I am hesitating here is that I am wondering if we have “parent with care” and “non-resident parent” in the right place in this answer.

The debt is due to the parent with care. Where the parent with care has died, we will try to find the executor of the estate, who may have an entitlement to the money. If we cannot find the executor, the debt cannot be collected. We have got to identify the person who would be legally entitled to that debt. We cannot collect on behalf of someone we have not been able to identify.

I shall move on to part payment and the various questions that were raised. Perhaps I may start with the points put by the noble Lord, Lord McKenzie—

Lord McKenzie of Luton: I am sorry to interrupt, but just so that we can tick the points off as we go along: in terms of write-offs, there is the issue around paragraph 13G(f) and whether that is an additional provision relating to write-offs and the circumstances in which that would apply.

Baroness Stowell of Beeston: This may be something I would prefer to write to the noble Lord about.

Again, moving on to part-payment, the noble Lord, Lord McKenzie, asked about safeguards and what guidance and support would be provided to the parent with care. The department will make an assessment of whether an offer is reasonable before passing it on to the parent with care. We will certainly not pass on an offer if we do not think that it is reasonable. In response to a later point raised by the noble Lord, Lord Kirkwood, in making that assessment, the agency

20 Nov 2012 : Column GC195

will want to be clear about the status of the non-resident parent in terms of their current employment and so on.

The noble Lord, Lord McKenzie, asked how we will measure the success of these powers. The department will record all instances where a debt is extinguished as the result of a part payment agreement or under the explicit circumstances in the regulations which allow write-off. We will monitor the results carefully to ensure that the powers are being used correctly, effectively and only in appropriate circumstances. This information will be made publicly available as and when it is requested, for example in the usual way via a Parliamentary Question, and the department will be happy to answer any questions and to respond as we progress.

I was also asked in what circumstances the CSA has advised a non-resident parent that their arrears will never be collected. Advising non-resident parents that their arrears will never be collected is not standard practice in the CSA. We are, however, aware that this has happened on occasion. Where the non-resident parent can provide evidence to support their claim, it would be very unlikely that the department would be successful in enforcing a liability through the court in the future. The non-resident parent has been given a legitimate expectation that this would not happen and therefore the arrears should be considered for write-off.

Lord McKenzie of Luton: I think that deals with the point I raised earlier that the Minister was going to write to us about. There is a specific provision that says,

“the non-resident parent has been informed by the Secretary of State that no further action would ever be taken to recover those arrears”.

If that refers to what has happened in the past occasionally, that deals precisely with my query.

Baroness Stowell of Beeston: I am grateful to the noble Lord—he is demonstrating his experience in this area. That is one fewer letter for us to have to commission and I am sure that my friends behind me will be grateful for that. The noble Lord asked if there is scope for the non-resident parent to disagree between allocations to the Secretary of State and the parent with care. We will give the parent with care’s debt the priority and both clients will be informed of this. The non-resident parent can specify which parent with care, as I explained in my opening remarks, but the department will decide the priority hierarchy after that. Obviously, we will give the parent with care priority over the Secretary of State.

The noble Lord asked what was defective about the enforcement powers that might lead us to this arrangement for part-payment. The enforcement powers are not defective, but there are circumstances in which there is

20 Nov 2012 : Column GC196

no suitable action to take; for example, where a non-resident parent is self-employed and has no assets. In this example, there is often no way of collecting the debt in full—I think that might address one of the points of the noble Lord, Lord Kirkwood, as well.

The noble Lord, Lord McKenzie, asked about the lump sum of part-payments and clarified why instalments have to be regulated for at a later date. This is one of those technical answers. If we regulated to allow for that now but could not facilitate it in practice I am advised that we could face legal challenge. We can therefore only introduce the legal power once we know that we can deliver it in practice. So we would if we could, but we cannot.

Lord Kirkwood of Kirkhope: That is a first.

Baroness Stowell of Beeston: I shall ignore the remarks of the noble Lord from a sedentary position and keep moving on.