Local Government and Public Involvement in Health Bill

Public Bill Committee, 27 February 2007.

Written evidence to be reported to the House

Clause 97

Tom Brake (Liberal Democrat, Carshalton and Wallington)

I beg to move amendment No. 171, in clause 97, page 66, line 23, at end insert—

‘(1A) In section 236 (procedure for byelaws), after subsection (1) insert—

“(1A) The procedure for the making and coming into force of the following byelaws shall be in accordance with this section:

(a) the regulation of hackney carriages (taxis) under section 68 of the Town Police Clauses Act 1847,

(b) the regulation of omnibuses under section 6 of the Town Police Clauses Act 1889,

(c) the regulation of local light railways and tramways under section 59 of the Leeds Supertram Act 1993, section 46 of the Croydon Tramlink Act 1994, paragraph 26 of Schedule 11 of the Greater London Authority Act 1999, section 62 of the Greater Nottingham Light Rapid Transit Act 1994 and other relevant local acts and Transport and Works Act Orders,

(d) the regulation of walkways under section 35(6) of the Highways Act 1980,

(e) the regulating of countryside recreation under the following enactments:

(i) section 6 of the Metropolitan Commons Act 1866,

(ii) section 84 of the Wimbledon and Putney Common Act 1871,

(iii) section 15 of the Commons Act 1876,

(iv) section 36 of The Epping Forest Act 1878,

(v) section 1 of the Commons Act 1899,

(vi) section 15 of the Open Spaces Act 1906,

(vii) section 193 of the Law of Property Act 1925,

(viii) section 235 of the Local Government Act 1972,

(ix) section 19 of The Ashdown Forest Act 1974,

(x) section 11 of The Dartmoor Commons Act 1985,

(xi) section 17 of the Countryside and Rights of Way Act 2000,

(xii) sections 90 and 91 of the National Parks and Access to the Countryside Act 1949,

(xiii) sections 12 and 13 of the Countryside Act 1968,

(xiv) section 41 of the Countryside Act 1968,

(xv) section 17 of the Green Belt (London and Home Counties) Act 1938.

(f) for land drainage purposes under section 66 of the Land Drainage Act 1991 (in so far as the body making the byelaws is a local authority),

(g) the regulation of acupuncture, tattooing, semi-permanent skin-colouring, cosmetic piercing and electrolysis under Part VIII of the Local Government (Miscellaneous Provisions) Act 1982,

(h) the regulation of the use of public libraries and museums and the conduct of persons in those premises under section 19 of the Public Libraries and Museums Act 1964.”.’.

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss the following: Amendment No. 172, in clause 97, page 66, line 28, at end insert—

‘(2A) In section 236 (procedure for byelaws)

(a) in subsection (3) leave out “by the confirming authority”.

(b) in subsection (3A) leave out “by the confirming authority”.’.

Amendment No. 173, in clause 97, page 66, line 28, at end insert—

‘(2A) In section 236 (procedure for byelaws)

(a) for “application for” substitute “the proposed”.

(b) for “apply for confirmation” substitute “confirm”.’.

Amendment No. 174, in clause 97, page 66, line 28, at end insert—

‘(2A) In section 236 (procedure for byelaws), in subsection (5) for “application for” substitute “the proposed”.’.

Amendment No. 175, in clause 97, page 66, line 28, at end insert—

‘(2A) In section 236 (procedure for byelaws), in subsection (7)

(a) for “the confirming authority” substitute “the authority by whom the byelaws are made”.

(b) for “submitted” substitute “made”.

(c) leave out “for confirmation”.’.

Amendment No. 176, in clause 97, page 66, line 28, at end insert—

‘(2A) In section 236 (procedure for byelaws) omit subsection (11).’.

New clause 14—Alternative procedure for byelaws (consequential amendments)—

‘(1) The Public Health Act 1961 (c. 64) is amended as follows.

(2) In section 75 (Byelaws as to pleasure fairs and roller skating rinks) omit subsection (8).

(3) In section 76 (Byelaws as to seaside pleasure boats) omit subsection (2).

(4) In section 77 (Byelaws as to hairdressers and barbers) omit subsection (3).’.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

It is a pleasure to see you this morning, Mr. Chope. The purpose of the amendments is to help the Government to achieve what they set out to achieve—to give local authorities greater powers. On Second Reading, the Secretary of State for Communities and Local Government said:

“It is the job of central Government to enable local government to play”

the role of

“leading the drive for sustainable communities, regenerating our city centres”.—[Official Report, 22 January 2007; Vol. 455, c. 1145.]

Allowing local authorities to make and confirm byelaws must be part of the recipe for that, yet only the Department for Communities and Local Government is giving up its power to confirm local authority byelaws; other Departments are not. Hence, we have in front of us a series of rather complicated amendments. They refer to a number of Acts and are designed to ensure that other Departments are required to give up their powers to confirm byelaws.

The approach that the Government have adopted hardly demonstrates joined-up government. What is the logic of the DCLG giving up its confirmatory powers when, for instance, the Department for Transport does not? Is the problem that the Department for Communities and Local Government has not managed to secure support for its Bill from the Department for Transport?

Hon. Members may be wondering whether that really matters: the answer is that it does. I have been supplied with a helpful briefing by the Local Government Association, which sets out a very good reason why it matters. Newcastle city council has been unable to get confirmation of a byelaw to ban smoking in a particular public place from the Department of Transport. The council made a byelaw application under section 35 of the Highways Act 1980 to ban smoking in Eldon Garden, which I am sure is a very pretty place. I do not know if any members of the Committee have visited Eldon Garden—perhaps they could describe it if they have. The application, which was submitted in March 2004, remains unconfirmed by the Department for Transport. At one point in the process, the Department said that it did not have time to consider the application.

Another smoking ban, confirmation of which was this time requested of the then Office of the Deputy Prime Minister by Newcastle, was submitted in September 2004 and took two years to confirm. Clearly, there is a need for Departments other than the Department for Communities and Local Government to give up their powers to confirm byelaws. If the Minister will not accept our sensible and straightforward amendments, I hope that at the very least he will bang his colleagues’ heads together at the Department for Transport to try to accelerate the process of confirming the byelaw to which I referred. That proposal might well be overtaken by other measures relating to smoking, but if a Department is taking nearly three years—from March 2004 to now—to fail to make progress on a byelaw, the Department for Communities and Local Government needs to pick up the issue and run with it.

Of course, the Department for Transport is involved with byelaws that apply to many other matters, be it taxis, walkways, horse-drawn omnibuses—I am not sure how many of those are still in operation—or guided transport systems other than railways. Bylaws on countryside recreation and local nature reserves are obviously the responsibility of the Department for Environment, Food and Rural Affairs. Byelaws on public libraries are the responsibility of the Department for Culture, Media and Sport, and those involving acupuncture, piercing and tattooing are the responsibility of the Department of Health.

The experiences of Newcastle city council tell us why the amendments are necessary. I hope that when the Minister responds to the debate, he will tell us whether his Department made any attempt to secure the support of other Departments. If it did, why did discussions about giving up confirmatory powers not bear fruit? Will he also confirm whether he will, in the example that I have referred to, put pressure on the Department of Transport to accelerate the process? Will the Government consider returning to this matter to ensure that their bid to give local authorities greater powers in relation to byelaws is delivered? I await the Minister’s response with interest.

Robert Syms (Conservative, Poole)

The hon. Member for Carshalton and Wallington has made a very good argument. One Department allowing the procedure but others not allowing it does not seem like joined-up government. The LGA has made a very good point and I hope the Minister can, if not today then before the end of proceedings on the Bill, at least reassure us that the Government have looked at the possibility of broadening the measure to include other Departments, which would be sensible.

Phil Woolas (Labour, Oldham East and Saddleworth)

I agree with the point the hon. Member for Carshalton and Wallington makes and I intend to explain why the Bill as it stands does what he wants it to do—and does a little bit more. I acknowledge that that is not the impression that hon. Members would have got on reading the Bill and the explanatory notes—indeed, I confess that it was not my impression—but it is the case.

The part of the Bill to which the amendments refer is an important part of the handing over of powers to local government. I urge the Committee to consider that the point the hon. Gentleman made regarding the time taken for byelaws to go through the machinery of Government is not in itself an argument for devolving those powers. A period of two or three years does not reflect laziness on the part of the Government; that period has always been fairly constant under all Governments. It simply reflects the fact that in the greater course of Government decisions, banning smoking in a park in Newcastle is not at the top of the agenda, although Opposition Members may think it should be, to take our minds off some of the bigger questions on which they disagree with us. Separate from considerations of devolution, good governance requires the measure.

In essence, the clause allows the local authority, having consulted on, prepared and advertised draft byelaws locally, to determine them itself. There is a proper process that an authority has to go through to enact a byelaw—after all, they are laws that are being passed under the powers that Parliament, not Government, has given. The remit of byelaws is defined by what is already in law, so Parliament is rightly the arbitrator. Once a council has prepared, advertised, and consulted upon draft byelaws, the byelaws can then be enacted without the authority of the Secretary of State. That is the important shift.

The hon. Gentleman asked about the Secretary of State for Communities and Local Government as distinct from the other Secretaries of State. I assure him that a Government Bill is introduced on behalf of the whole Government, agreed through the proper collective procedures, it is not a Bill of one Department. As I said in response to the debate last week, the Secretary of State, in law, is not an individual; it is the Secretaries of State in practice. To give the hon. Gentleman more detail, I shall explain the process.

If Parliament gives the go-ahead, we intend to use the powers to introduce the new procedures first in relation to byelaws that are confirmed by the Secretary of State for Communities and Local Government. The byelaws regulate low-level nuisance in local spaces, such as parks and beaches. The Committee will recall from evidence that beaches and areas near to them are often subject to byelaws, as are marketplaces. They deal with local matters that councils and their communities are best placed to decide on. Reference to central Government in such circumstances is an unnecessary bureaucratic step. That backs up the point about time delays.

In future, other Secretaries of State with responsibility for confirming byelaws may decide, following consultation—that is not a caveat “may”, but a permissive power—that it would be appropriate to make use of the powers. In other words, the Bill allows the devolution of byelaw-making powers to councils across the board. As in all other functions, it will be for authorities to ensure that they are acting reasonably and within their powers when making byelaws under the new procedure. If they fail to do so, they risk challenge in the courts. I anticipate being asked whether there is an appeal on a byelaw. There is not, other than the normal democratic procedures in councils. The only recourse would be to the courts if proper due process had not been followed. That reflects the Government’s genuinely devolutionary approach.

To support the local authorities in following the new procedures, we shall maintain the stock of general advice and model byelaws that is currently available, so that byelaws in future are prepared within a robust framework of guidance and good practice. That is necessary to help local authorities.

The amendments, backed by an LGA briefing, are unnecessary. The Bill goes further. I shall explain why. Some byelaws deal with matters on which it might, on the face of it, be considered that some degree of central scrutiny by the Government should be retained. For example, certain transport matters might be subject to byelaws made by private operators such as tram companies or airports, which have no direct accountability to local people in the same way as local authorities do. I am sure that members of the Committee agree that there should be accountability.

Another example is byelaws to deal with countryside recreation in national open spaces, such as national parks and areas of outstanding natural beauty. Those sometimes raise national issues that cause significant controversy and debate. A specific example was the proposed byelaw on speed limits applying to boats on Lake Windermere. Those of us in the north-west will remember that that proposal caused huge controversy not only in the Windermere area, but throughout the region and probably the country because the users of the boats on Lake Windermere come from all over the country. That is a good example of my argument, so I thought that I would labour it. To add to the chuckles from Opposition Members, I must say that it was a huge issue in the Oldham Evening Chronicle.

It is for such reasons that we propose the approach provided for in clause 97 whereby, for the byelaws prescribed in regulations, the Secretary of State will no longer have a role. In that way, the policy decision on whether particular byelaws should remain subject to the Secretary of State’s consent can be taken on a subject-by-subject basis. If, following consultation, it is decided that a central confirming role is no longer required for particular types of byelaw, the Bill will allow us to use the new powers provided in regulations made under new section 236A of the Local Government Act 1992, which we propose in the clause.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

Will the Minister tell the Committee whether other Departments are looking favourably on the approach that his Department has adopted? I would have thought that the Department for Transport, for example, might be very keen to give up any responsibility for Eldon Garden.

Phil Woolas (Labour, Oldham East and Saddleworth)

I can give the reassurance that the hon. Gentleman is looking for in two ways. First, this is a Government Bill and, secondly, it is not only agreed, but pursued with enthusiasm. Such matters are not at the top of the in-trays of Secretaries of State. As the evidence sessions showed, although the decisions are signed off by the Secretaries of State, in practice it is humble junior Ministers such as I—with the professional advice of our officials—who deal with these matters. It is sensible not to have such matters dealt with by a Secretary of State. New section 236A will allow for the new approach to be adopted.

The amendment offers a specific list of organisations. Prescribing clearly in regulations the types of byelaw that can be enacted without first seeking central confirmation also enables certain elements of the byelaw-making process to be subject to minimum requirements—for example, consultation on draft byelaws and publicity of byelaws following their enactment—that are different from those provided for in current legislation, ensuring some consistency of standard if necessary. Through that regulation and through the change to section 236 of the 1972 Act, we will capture the totality and other organisations that may not be included in the amendment, as well as future bodies that may come about as a result of process and some of the processes in the Bill.

My rationale for not listing the organisations as the amendment does, which on the face of it seems to move against the approach that we took regarding the list of bodies that are subject to the duty to co-operate, was twofold. First, there is the pragmatic consideration that we need to be certain that we cover all bodies. We did not want to have to come back to primary legislation because we missed some out. Some of these bodies are pretty obscure and date back centuries, although that is not to say they are not honourable and worthy bodies—Lichfield park may be included for all I know. Secondly, not listing them gave us a catch-all regulation for which we believe there is a consensus.

Robert Syms (Conservative, Poole)

The Minister has set out the complexities surrounding the organisations. At what point, following the passage of the Bill, will the Government come forward with those regulations? Will we be waiting a long time or are things ready to go?

Phil Woolas (Labour, Oldham East and Saddleworth)

We are out of the hangar and on the runway, but the engines are not yet fired up. To give two examples, in the Department for Culture, Media and Sport, my hon. Friend the Member for West Ham will be pleased to learn, libraries and museums byelaws are intended to be handed down once the Bill is passed, while the Department of Health wants to pass over that hugely important issue of regulation and byelaws regarding tattooing, which has been hotly contested in some parts of the country. There are other examples, and I will do my best to ensure that the Eldon Garden case is pursued as well.

That is the argument against the amendment. The intention is welcomed, but in fact the regulations will do what the hon. Member for Carshalton and Wallington wants to achieve and more. On that basis, I resist the amendment.

Tom Brake (Liberal Democrat, Carshalton and Wallington)

I thank the Minister for a very full, straightforward and sensible explanation of the reasons why it is not appropriate for us to press the amendment to a vote. Clearly, the momentum will be behind the Departments that want to make those changes because, as the Minister says, a byelaw relating to Eldon Garden is clearly not going to be top of the agenda for the Department for Transport. On that basis, I am very happy to withdraw the amendment.

Clause 98

David Burrowes (Conservative, Enfield, Southgate)

I have a quick question on the clause. Given that the central confirming role of the Secretary of State is not necessary in relation to certain prescribed subjects, why not give the power of enforcement in relation to those subjects to which the alternative arrangements apply? The Secretary of State is willing to devolve powers to create some byelaws, so why not allow enforcement in respect of those subjects that have been prescribed in that manner without having to go back to the Secretary of State for confirmation?

Phil Woolas (Labour, Oldham East and Saddleworth)

Let me explain what we are trying to do, which I think will answer the point arising from clauses 98 and 99. Clause 98, which refers to fixed penalties for breach of byelaws, gives the Secretary of State the power to make regulations that will provide for the enforcement of the types of byelaws specified in the regulations through fixed penalty notices as an alternative to enforcement through magistrates courts. Fixed penalties are an established way of dealing with low-level environmental nuisances, such as dog fouling and graffiti. Extending fixed penalties to the enforcement of certain byelaws will be consistent with their use in other areas and allow a co-ordinated approach by the local authority and Departments. Fixed penalties provide an effective deterrent and avoid the cost of court action.

Initially, we intend that the new arrangements will apply only to byelaws that are subject to the alternative procedures set out in the previous clause. In future, other Departments with policy responsibility for byelaws may, following consultation, decide that it would be appropriate to make use of the new powers. I am repeating the point that I made to the hon. Member for Carshalton and Wallington on his amendment. The clause also confers on the Secretary of State the power to make regulations that specify the range within which the amount of a fixed penalty must fall.

Where a range has been specified, local authorities may choose to set an amount within that range. If no range has been set, local authorities will have the freedom to set the penalty. Where the local authority does not specify a penalty for the breach of a byelaw, the clause provides for a default amount of £75. Giving local authorities the ability to vary penalties and offer discounts for early payment will enable them to take account of local conditions and to encourage early payment of fines.

The clause empowers the Secretary of State to make an order to change the default amount as necessary so that the level remains in line with similar low-level offences. The clause also gives an authorised officer who proposes to issue a fixed penalty notice for breach of a byelaw the power to require the person to whom he or she is giving the notice to give their name and address. A person who fails to give their name and address or who gives a false name and address will be committing an offence. That is within established procedures for the issue of fixed penalties. I think that that answers the point that the hon. Gentleman makes about enforcement. Perhaps he would indicate whether that is the case.

Mr. Burrowes indicated assent.

Phil Woolas (Labour, Oldham East and Saddleworth)

Finally, we could make regulations providing for a fixed penalty regime in relation to a byelaw for which the Secretary of State kept his or her confirmation powers. We are not doing anything new in terms of existing procedures and powers in some areas, dog fouling being the most well known. We are extending that process to a wider range of byelaws to allow Departments to devolve powers to local authorities to make real the enactment and enforcement of byelaws. On that basis, I commend the clause to the Committee.

Clause 99

Robert Syms (Conservative, Poole)

I have a brief point to make on the use of fixed penalty receipts. The notes to the clause say that the local authority must

“have regard to the desirability of using the money”

to tackle the nuisances caused by contravention of byelaws. If the Bill is devolutionary, why should we tell local authorities what to do with fine money?

Phil Woolas (Labour, Oldham East and Saddleworth)

That is a finely balanced argument, and it is reasonable of the hon. Gentleman to make it. On the one hand, one could say that local authorities should not use the fixed penalty notice powers as an income-generating method, lest an accusation of stealth tax or some other such spurious accusation be made by the political parties that make such accusations. The real point, however, is that for a fixed penalty to carry public consent, as any law, fee or fine must do, there must be confidence that it is being levied for its stated purpose.

On the other hand, one could say, as the hon. Gentleman has, that if we are genuinely devolutionary and trust local authorities, we should allow them to make that decision and carry the can. In practice, if the ring-fenced and hypothecated approach is taken, there are problems in defining how it will work out. Hon. Members will be familiar with the difficulties of identifying fixed costs, marginal costs and so on in allocation.

The Government have taken the middle route, proposing simply that the councils should have regard to using the money generated by such fixed penalty notices to address the general problem on which the fixed penalty notice is meant to bear down, without being too prescriptive. To help to carry public consent and help the councils to carry it, it makes sense to ask the Committee to agree to the measures to put that encouragement into the Bill.

Hon. Members will be aware of the controversy surrounding fines from speeding cameras—various campaigns suggest that the fines have nothing to do with bearing down on speeding but are meant to raise revenues. I want to declare that councils have the power to bear down on offences. In that way, we can bolster local government’s ability to improve communities. That is the reason for the clause.

Clause 101

Robert Syms (Conservative, Poole)

Again, I have a brief question. The clause talks about allowing community support officers and other accredited persons to levy fixed penalty notices. Will the Minister list who those other accredited persons are likely to be?

Phil Woolas (Labour, Oldham East and Saddleworth)

I thank the hon. Gentleman for asking that question, because it allows me to put on the record again that this proposal already exists in other legislation. We have in mind specifically dedicated officers, who will occasionally be able to issue fixed penalty notices in some circumstances: on some occasions, those will be wardens or rangers who are employed by the local authority or partner organisations. In some cases, trading standards officers may be involved. That may be appropriate.

On the police community support officers, the role of the police is established in the Police Reform Act 2002, schedule 5 of which contains a list. That allows a local authority flexibility to designate which officers or officials would be covered, so it is a flexible power. Before a community support officer, or such an accredited person, is able to issue fixed penalty notices, the chief police officer is involved in the designation. Indeed, an officer cannot be designated without the chief police officer’s consent. We have rightly built that safety net into previous legislation, which applies to this measure.

Robert Syms (Conservative, Poole)

So, irrespective of who issues a notice, the final responsibility will still be with the local authority and, under the appeal process, it will decide whether a notice was issued fairly.

Phil Woolas (Labour, Oldham East and Saddleworth)

The citizen is backed by the law and access to the courts. If a fixed penalty notice is issued by an accredited officer of the local authority, including a police community support officer, that officer will have been accredited by the chief police officer. On an appeal against the issue of a notice—that is, “Not guilty, guv!”—or a challenge to the process and the right of a person to issue it, people will have recourse to the courts, as is currently the case under byelaws. Often, the public do not realise that, but it is so.

If a person gets such a notice and does not pay, including if they want to challenge it, the matter goes to court. If you get one, Mr. Chope, and wish to challenge it, just do not pay it and you will get your day in court, as is already the case. This provision is a simple extension of the existing power.

Clause 102

Philip Dunne (Conservative, Ludlow)

I should like the Minister to clarify two aspects of the clause. First, does it, or previous clauses, cover local authorities wishing to amend, rather than revoke, a byelaw? Secondly, subsection (2) provides a power to local authorities in relation to byelaws that they have made. I accept that separate clauses will give power to a Secretary of State to revoke a byelaw. However, revoking a byelaw set up by some other authority, perhaps in respect of bridleways open to all traffic, which are an issue in my constituency, or re-routeing a footpath, is often highly controversial even though it may be appropriate given the changes in agricultural techniques since it was originally introduced. Could amendments of that nature, or revocations of powers that may not have originally been made by the relevant authority, be revoked or amended under the clause?

Phil Woolas (Labour, Oldham East and Saddleworth)

The clause is in the Bill for two reasons. The first is that we need to give the power to make a byelaw revoking one previously made by the authority, where, for some reason, there is no other power to do so, either because the byelaw has become obsolete or it is not known from where it derived. That is why we have put in a fall-back for the Secretary of State, which appears to be, on the face of the Bill, contrary to the general direction of travel.

As the hon. Gentleman’s example shows, some byelaws were put into place by bodies that no longer exist. It is not intended that amendments to byelaws should be covered. The process for a new byelaw requires the revocation of the old one and we believe that putting this power down to local authority level is the sensible way to approach the issue.

The clause also gives Ministers in Wales, as well as the Secretary of State, the powers to revoke byelaws that have become obsolete or unnecessary under the process that I have described. It is our intention—and it is important to put this on the record—that the power will be used only where the power to revoke the byelaw, or the identity of the authority which should otherwise revoke it, is unclear. In other words, it might not be known where the byelaw comes from and the authority that should revoke it may be unclear. In those circumstances, we have this tidying-up exercise.

In summary, the clause is designed to cover cases where the aim is to get rid of a byelaw but it is not clear, as I have said, who can do that. That is the answer to the hon. Gentleman’s question.

Clause 104

Robert Syms (Conservative, Poole)

I would be grateful if the Under-Secretary would give an overview of the likely impact of this clause. I welcome the sensible action of taking some of the larger parishes out of the provision, although I do not intend to provoke a discussion on Lichfield or Weston-super-Mare or wherever. I would be grateful if she could briefly set the scene for this part of the Bill.

Angela Smith (Labour, Basildon)

It may be helpful to set the clause in the context of general devolutionary thrust of the Bill and the responsibility on local authorities to monitor their own performance. The clause amends the definition of local authorities, and therefore the definition of best value authorities for the purpose of part 1 of the Local Government Act 1999. Applying the principle of proportionality, this clause removes various smaller bodies from the scope of best value.

Subsection (1) amends both the definition of English and Welsh local authorities by removing parish councils, parish meetings and community councils from the definition of local authority in section 1 of the London Government Act 1999. Subsection (2) removes local precepting authorities from the list of bodies to which the Secretary of State may, by order, extend the duty of best value. That ensures that the definition of best value authority cannot be amended by an order under section 2 of the 1999 Act to make parish councils and parish meetings best value authorities. Subsection (3) refers to schedule 7, which makes minor and consequential amendments.

The clause affects only those larger towns and parish councils that are currently subject to best value. That is 41 out of more than 8,500 town and parish councils. All other parish councils, including Welsh community councils, were exempted from best value by orders made in 2002 and 2003. That will give those authorities more discretion to monitor and manage their own internal performance and we consider that it will give them more room to deliver high-quality and responsive local services and to improve their internal performance.

Clause 106

Angela Smith (Labour, Basildon)

The clause is a key plank in the Government’s commitment to ensuring greater engagement and empowerment of local communities. It will insert a new section 3A into the Local Government Act 1999 placing a duty on best value authorities in England, except police authorities, to involve representatives of local persons in the exercise of authority functions where appropriate.

Authorities will need to consider if and how local representatives should be informed of, consulted on and/or involved in local authority decisions. It will be for the authorities themselves to determine the most appropriate means of involvement, but they must have regard to any guidance issued by the Secretary of State. Within those existing powers, authorities will be able to involve local people directly in management and in decision-making responsibilities.

The leverage provided by the duties is essential to ensure that authorities engage appropriately with local communities. It will provide an important counterbalance to the reduction in top-down controls in the new performance framework. A number of authorities already inform, consult and involve local people, but not all of them do. We want all people, irrespective of which authority area they live in, to benefit from greater engagement and empowerment.

Several mechanisms will provide recourse should an authority not meet requirements of the duty. Risk assessment, audit and inspection will have a greater focus on outcomes for citizens, including consideration of how an authority is meeting the duty. That will be an external challenge to authorities and may lead to closer inspection if they are found wanting.

National performance indicators, including citizen perspective indicators, will also be published to increase accountability not only to inspectorates and partners but to local people. If the indicators show cause for concern, it could lead to additional inspection or to challenge from peers or from local people who raise a community call for action. The new overview and scrutiny arrangements will also provide an opportunity, if an authority appears to be failing in its duty, for internal challenge by councillors. Should the issues be raised by a community call for action, that in turn could be examined by overview and scrutiny.

The clause will provide the Secretary of State with powers to make additional exemptions from the duty using secondary legislation subject to the negative resolution procedure. It will not provide authorities with any additional powers, and is therefore not a duty to devolve. I commend the clause to the Committee.

Robert Syms (Conservative, Poole)

I welcome the Under-Secretary’s making that clear to the Committee. She spoke about the involvement of local representatives. Were any of those community organisations or local representatives involved in the standards issue? People representing a particular body do have interests when they are consulted.

Angela Smith (Labour, Basildon)

That would be a matter for the Standards Board to consider. There is not a direct relationship, but the board will consider all matters in the normal way. I think that that will give local residents some comfort and clarity.

Clause 113

Robert Syms (Conservative, Poole)

Given that we are now debating the constitution of the Audit Commission, I should be grateful if the Minister gave us an overview of the changes in this part of the Bill. I may have questions after I hear what he says.

Phil Woolas (Labour, Oldham East and Saddleworth)

We have moved swiftly to clause 113.

The policy behind the clause is, first, to ensure that the Audit Commission fulfils the purpose for which it was established and is seen to be focusing on that. The Audit Commission was established to help local authorities to control their costs. That was its prime objective. Labour Members may recall that the Audit Commission was established by the then Prime Minister, now Baroness Thatcher, as part of what was described at the time as an onslaught on local government. That was in the days when central Government was not a friend of councils, unlike the present time, when consensus is the order of the day.

Teasing apart, my serious point is that it is often forgotten that the Audit Commission is there to oversee the books and to ensure that value for money and efficiency are achieved. The Audit Commission has been a huge help to local authorities in meeting those goals, as we saw again last week in the announcement of findings of the comprehensive performance assessment, which is the second part of the policy in which the changes are set. Controversial though the comprehensive performance assessment was at the time of its introduction and painful though it has occasionally been, it has fulfilled its purpose of securing a general improvement in the quality of local government service provision. Those are the two policy contexts. I am grateful to you, Mr. Chope, for allowing me leeway.

To respond to the hon. Member for Poole, clause 113 reduces the number of Audit Commission board members from the current minimum of 15 and maximum of 20 to a minimum of 10 and a maximum of 15. The number of commissioners that is currently prescribed is more than the ideal number for incisive debate of strategic issues. It is a bit too big and unwieldy. The Audit Commission has been carrying vacancies on its board for almost two years and is operating with only 13 members. Experience shows that that is a sufficient number to carry out the relevant functions. The Audit Commission’s chair and chief executive have expressed the view that the statutory requirement should be decreased as proposed. We are about to embark on a recruitment exercise to bring the number of board members up to 15 from this summer.

The proposals have been advanced by the chair and the chief executive of the Audit Commission and I believe that 10 to 15 board members are sufficient for proper decision-making experience and proper scrutiny of the Audit Commission’s work, without being unwieldy and over-bureaucratic. It is a question of balance and judgment. I think that it is best to take the advice of the chair and the chief executive and agree to the change.

Robert Syms (Conservative, Poole)

I am happy with what the Minister said.

Peter Soulsby (Labour, Leicester South)

I wish to speak briefly about the size of the Audit Commission board. I was a member of it some years ago and I can confirm what the Minister said. Even at that stage, it was felt that the 15 to 20 size was above the optimum. The reform to reduce its size will make it more manageable. It will continue to provide proper oversight and enable good representation of those who have an interest in the work of the commission. In addition, governance will be significantly improved.

Clause 116

Robert Syms (Conservative, Poole)

I should be grateful for a little more explanation of the amendment.

Angela Smith (Labour, Basildon)

The hon. Gentleman tempts me to admit my embarrassment about the fact that the amendment was tabled because of a typing error in clause 116(3). It is helpful that we can correct that error today. The current wording:

“Before making an order under this section, the Secretary of State must consult the Audit Commission”

suggests the need for a statutory instrument. That is not the case. The scheme essentially requires the consent of the Audit Commission and, more importantly, the staff concerned. The amendment merely corrects that error.

Clause 117

Tom Brake (Liberal Democrat, Carshalton and Wallington)

I seek clarification from the Under-Secretary on one point. I understood that the Audit Commission was concerned about whether, at the request of local authorities, it would be able to provide them with advice on an ad hoc basis. Is my understanding correct? Will the hon. Lady explain whether the Audit Commission will be able to deal with an ad hoc request made by a local authority?

Philip Dunne (Conservative, Ludlow)

It is my understanding that the Audit Commission receives 20 to 30 requests a year from local authorities to undertake investigations of various natures, from which it derives some income. I shall appreciate the Minister clarifying whether the ability of local authorities to request a review outside the normal annual review by the Audit Commission will continue if the clause is agreed to.

Angela Smith (Labour, Basildon)

I am grateful to hon. Gentlemen for their comments. I hope that I can do justice to them and address their concerns. The clause replaces section 37 of the Audit Commission Act 1998 with a wider power for the Audit Commission to provide advice or assistance. Section 37 enables the Audit Commission to provide assistance to certain named inspection bodies such as Ofsted and Her Majesty’s chief inspector of prisons, and to charge for such assistance. The clause also inserts in the 1998 Act new schedule 2A, as set out in schedule 11, which makes provision for the interaction of the Audit Commission with various persons and bodies in the exercise of its inspection and studies function. If we take into account clause 122, I can extend the debate and that may help in later discussions.

Clause 122 repeals sections 35 and 35A of the 1998 Act, which allow the commission to undertake fee-paid improvement studies of certain bodies at their request, or in some cases at the request of the Mayor of London. When we were considering such matters, we saw that there was a potential conflict of interest arising through the same body offering both improvement support and inspection, in effect, operating as a critical friend and as an external regulator. Concerns have been expressed that this might lead some bodies to consider buying improvement services from the commission to obtain a better result at inspection. Commission inspectors could then be called on to judge impartially improvement work carried out by their colleagues.

There is also a value for money issue. The Government already fund the Improvement and Development Agency, the IDeA, to carry out improvement work and the commission—also a publicly funded body—should not be competing in the same market for fee-paid improvement work.

We took on board comments made on Second Reading. We are considering our policy regarding the Audit Commission’s powers to offer improvement advice. The comments made on Second Reading were quite scurrilous in some cases, referring to the opportunity to give money to private companies. That is not the case at all. I have outlined to the Committee the concerns that have been raised about the conflict of interest. We are reconsidering our policy and we want to discuss the issue further with the commission.

I hope that this has helped the hon. Gentlemen. The matter is being discussed and it is being looked at. I hope that satisfies the Committee.

Robert Syms (Conservative, Poole)

With the transfer of the benefit fraud inspectorate into the Audit Commission, will the commission, at the request of the Benefits Agency, be able to give advice on whether they can save money and how better to run their organisation? Is that still a two-way street?

Angela Smith (Labour, Basildon)

Yes, it is.

Schedule 11

Phil Woolas (Labour, Oldham East and Saddleworth)

I beg to move amendment No. 144, in schedule 11, page 150, line 38, at beginning insert ‘Subject to paragraph 9(2A),’.

Christopher Chope (Conservative, Christchurch)

With this we may take Government amendments Nos. 145, 146, 142, 143 and 148 to 150.

Phil Woolas (Labour, Oldham East and Saddleworth)

We shall continue the double act. On the matters which have just been raised, I am amazed not to have heard cheers and seen thank-you notes passed from Opposition Members for the fact that the Government listened to the arguments put to us.

New schedule 2A amends the 1998 Act, which makes provision for the interaction of the Audit Commission with various public authorities. Part 1 of the new schedule—paragraphs 1, 2 and 3—sets out the other inspectorates, referred to as “inspection authorities”, and public bodies with which the Audit Commission will interact over inspections, and defines “public authority” and “inspection”.

Paragraph 4 requires the Audit Commission to list the inspections that it proposes to carry out and the way in which it will do them. Before drawing up the programme, the commission must consult the Secretary of State, the inspection authorities and any other body specified by the Secretary of State, unless that requirement is waived by the body concerned. That might occur where the commission is not proposing to inspect any bodies within the remit of a particular inspectorate, so there would be no benefit gained from consulting that body. Paragraph 5 provides the Audit Commission with a gatekeeper role in relation to the inspection of local authorities.

What we are proposing—I hope it will be accepted—is a good act of joined-up government. The Government’s policy is to reduce the number of inspectorates from 11 to four, but councils complain not only about the number of inspectorates that can come in and inspect their various functions, but about the apparent and often real unco-ordinated way in which those inspections are carried out. At its most extreme, that can debilitate a local authority’s ability to do its business. Indeed, at the end of the spectrum is the poor old Isles of Scilly unitary authority which has five local government offices which were subject to more than 250 days of inspection the year before last. There are other examples that I could give.

We are trying to put in the gatekeeper role so that the lead inspectorate body for the public services in question—in the present case, local councils and the Audit Commission—can act as a gatekeeper to co-ordinate other inspectorates, such as the children’s inspectorate. That gatekeeper role is made real by paragraph 5 of the proposed new schedule. In essence, the Audit Commission will be able issue a notice to prevent a proposed inspection by another inspection authority from going ahead if it considers that the inspection or the manner of that inspection will impose an unreasonable burden on the inspected organisation.

The Secretary of State will specify which organisations are covered by the gatekeeper provisions. I expect that the Audit Commission and the other inspection bodies will discuss and agree the programme before formal consultation takes place. The Secretary of State will have reserve powers to allow inspections, as Parliament and local authorities may require in certain circumstances. That is what we are trying to achieve and it is consistent with other areas of Government policy. I think that it is to be generally welcomed. [Interruption.] Apologies on behalf of my hon. Friend the Whip. He has got many ways of telling me to get a move on, and I am grateful to him for that.

Paragraph 9 of proposed new schedule 2A was intended to confer a power on the Audit Commission to provide advice or assistance to other public authorities in England and to named audit bodies in Scotland, Wales and Northern Ireland. We now wish, after consultation, to extend the scope of that power to allow the Audit Commission to provide advice or assistance to other public bodies outside the United Kingdom and to any public authority within the devolved Administrations. We consider that the provision of advice or assistance will only be a small amount of work, but it will allow the Audit Commission to share its expertise and knowledge overseas. We believe that that would be a valuable export and attribute to our country in our reputation overseas. We are the best at public sector auditing and we ought to give our commission the ability to use that expertise overseas. It could help to generate an income stream for the Audit Commission and to increase the body of knowledge and expertise that it has and it will be good for the United Kingdom’s reputation overseas.

We intended that the commission be able to charge a fee for carrying out work at inspection authorities, with the requirement that it obtain consent from the Secretary of State to charge a fee to other public bodies. That was to ensure that the advice or assistance function did not become onerous and lead to the commission straying from its core remit and to ensure that the commission did not use the power to reintroduce its voluntary improvement work which was to be repealed under clause 122. We now wish for that consent requirement to be removed for the reasons that I have given. The Audit Commission has offered assurance on both of those points and there is an added comfort that the commission’s core remit of audit and inspection are statutory duties, so that it is obliged to carry them out.

In practice, the commission would only provide advice or assistance at the request of another body, so there would be a natural limit on the demands upon it. In view of that, we are proposing that there should not a consultation for charging for advice and assistance either in the United Kingdom or abroad. My hon. Friend the Under-Secretary has already referred to our wish to amend clause 122 in the light of the representations made, the discussions in Committee, and the points made at the evidence stage and on Second Reading. Once again, I hope that the Committee will agree that we are adopting a sensible and open approach.

Peter Soulsby (Labour, Leicester South)

I welcome the proposals that the Minister has outlined. In particular, I welcome the initiation of a clear gatekeeper role, which will involve giving one body the lead responsibility. That lead role will ensure the co-operation and co-ordination of inspection that has often been lacking in the past.

In general, I welcome the reduction of the overall burden of inspection and the proposals that will lead to a reduction of the number of inspectorates. The problem is not only lack of co-ordination between inspectorates, but the multiplicity of them.

I also welcome the intention that underlies the proposals to tailor inspection to an assessment of risk in the real world. Inspection has in the past been perceived as the ticking of boxes regardless of realities on the ground and the importance of the services being inspected. I welcome the proposals and the intention that lies behind them, and I hope that the measures lead to joined-up inspection.

Phil Woolas (Labour, Oldham East and Saddleworth)

I am grateful to my hon. Friend, who speaks with the benefit of having been the leader of a major local authority. My observation from experience is that valuable auditing exercises can become tick-box exercises as people gain more experience in the inspection regime. That does not invalidate the purpose and remit of the inspectorate regime as envisaged—I am not disparaging the findings of that regime. It was put to me by one chief executive that there is a difference between learning how to pass one’s driving test and learning how to drive. Although the driving test is a good test of whether one can drive, the experience of driving is different. That type of argument becomes more attractive the older one gets, but I am grateful for my hon. Friend’s endorsement.

Clause 118

Phil Woolas (Labour, Oldham East and Saddleworth)

We now move on to the interaction of the benefits inspectorates and the Audit Commission. I should explain that we are not talking about benefit fraud or the inspectorate that deals with it; we are talking about the inspectorate that deals with the administration of benefits. Of course, benefits and revenues—or “bens and revs”, as they are known in local councils—are a very important part of the function of authorities. The interaction between the Audit Commission and benefits inspectors is what the clause deals with.

The clause changes the Social Security Administration Act 1992, which some hon. Members may remember was quite controversial. No takers? Surely I am not the only person here who was at the demonstration? The clause will ensure that if the Secretary of State decides to authorise people to report on benefits administration in local authorities, those people will have to go through the Audit Commission’s gatekeeper process before undertaking any inspection of local authorities. That is a practical example of what my hon. Friend the Member for Leicester, South referred to. The process will involve authorised people preparing and sharing with the Audit Commission a document setting out the proposed programme of inspection.

Subsection (4) requires any authorised persons to co-operate with the Audit Commission and gives them powers to work jointly with the Audit Commission where co-operation or joint working benefits the efficient and effective discharge of the authorised person’s functions. In other words, it will allow the expertise of the benefits inspectorate to be utilised without creating an unco-ordinated burden on the local authority.

The provisions support the strategic forward planning role proposed for all inspectorates in the Government’s policy across Departments, which is that they consult and share their proposed inspection programmes and frameworks with each other to enable them collectively to reduce duplication and the weight of inspection on local authorities. As in other public bodies in which the Audit Commission may have a role, that will be done through the respective gatekeeper, for example Her Majesty’s inspectorate of constabulary or the National Offender Management Service.

The provision will enable the identification of opportunities for integrating inspection events and provide a way to discuss and alter inspection programmes to make them more efficient and less disruptive. It will also have the consequential benefit of allowing personnel and other resources to be shared to get the best of both worlds. The provision is sensible and is welcomed by the Audit Commission. I commend it to the Committee.

Clause 119

Phil Woolas (Labour, Oldham East and Saddleworth)

I wish to use this opportunity to put on record what the clause is about. It may be a dry subject, but it is important that local authorities understand the intention behind the clause.

The clause refers to the powers of auditors and inspectors to obtain information, which is central to their raison d’être. It clarifies the powers of auditors and Audit Commission best value inspectors to obtain such information. It makes explicit their right to copy and take away documents and updates the original powers in section 6 of the Audit Commission Act 1998 and section 11 of the Local Government Act 1999 to include electronic information and computers to take account of the fact that information is now routinely held electronically. I remember debating that clause in 1999. As I recall, Members on both sides of the House argued that it was not necessary. It seems a long time ago now. It is important that access to information held electronically is granted to Audit Commission best value inspectors.

The power will ensure that auditors can require such information to be produced in a form that can be taken away if necessary, in order to help the Audit Commission to do its job. Importantly, the clause also makes it clear that it is a criminal offence to obstruct the exercise of the power. The requirement for auditing information is important.

Robert Syms (Conservative, Poole)

Have there been examples of people in local authorities trying to obscure information from auditing organisation inspectors? Presumably this is a reserve power but I would be interested to know whether there are examples.

Phil Woolas (Labour, Oldham East and Saddleworth)

I am aware of where the threat of the power has been used, but I cannot recall the power being used during my period, although I am sure it has been in past decades. The hon. Gentleman nods to recognise my point about the threat and, without that threat and without it being a criminal offence, shredding—and its electronic equivalent—may be more prevalent. I strongly believe that there is a good regime of propriety in local government in this country and it will be perpetuated by this measure. The regime has been built up under Governments of all political persuasions.

The clause confirms the practice employed by auditors and inspectors in obtaining such information, so the proposed processes are current practice. Concern may be raised about the potential for unreasonable use of these powers and it is known that inspectors are sometimes over-zealous for all sorts of reasons. This clause ensures that auditors and inspectors must act reasonably. For example, they must not remove original documents critical to the running of an organisation, without very good reason. They must also exercise a duty of care over any documents and information obtained. Therefore, the clause gives inspectors responsibilities as well as rights. In that respect, I believe it provides a properly balanced approach. I commend the clause to the Committee.

Clause 120

Phil Woolas (Labour, Oldham East and Saddleworth)

This clause clarifies that the Audit Commission’s powers of best value inspection under the Local Government Act 1999 enable it to carry out general inspections of the performance of best value authorities and not simply inspections of the arrangements in place to deliver continuous improvement.

The other public service inspectorates have more explicit performance inspection powers. The Audit Commission has expressed concern that its power could, as a result of the changes to best value in part 8 of the Bill, be interpreted as simply focusing on the arrangements that authorities have in place and not about their performance, which is at the heart of best value. As we say in Lancashire, we have got to see the wood for the trees—that is probably said elsewhere, but we certainly say it in Lancashire.

The clause ensures that the Audit Commission will continue to be able to inspect a best value authority’s performance. That will keep the commission in line with other public service inspectorates and eliminate possible concern about their joint working.

The clause is important in relation to clause 106 because it gives real power to the best value duty to inform, involve and consult, by ensuring that that is a continuous inspection. When citizens, residents, voluntary sector organisations and others question where the teeth are to that best value duty, part of the answer, as referred to by my hon. Friend the Under-Secretary, is here. The clause appears rather obscure, but it is important in the devolutionary process and the reconnection of the public to public services.

Clause 121

Robert Syms (Conservative, Poole)

I would like more information on this clause. Presumably, this is important, not only for the commission, but for all respective local authorities. Will the Minister say more about why there are changes here, as we have always had a regime with league tables and various studies published? Are the alterations to bring the overall change under this clause into line to broaden the powers of the Audit Commission?

Phil Woolas (Labour, Oldham East and Saddleworth)

This measure relates to the studies that the Audit Commission undertakes on a national basis and not to the nationwide surveys. Formally, the clause amends section 33 of the Audit Commission Act 1998, and it allows the commission to undertake studies to help to improve economy, efficiency and effectiveness at the best value authorities, audited bodies and certain local government bodies in Wales. The commission has similar powers to section 34 of that Act to publish reports assessing the impact of, in particular, statutory provisions or directions or guidance issued by a Minister of the Crown.

The clause requires the Audit Commission to consult the Secretary of State—or, where appropriate, Ministers in Wales—before carrying out or promoting studies or reports. The commission usually carries out a public consultation exercise on each national study’s programme. The clause formalises the inclusion of the Secretary of State in that consultation and is aimed at minimising duplication and increasing efficiency. That means that when a national study is done, it should be done in co-operation. Part of my rationale, which I have discussed with the Audit Commission, goes back to my introductory remarks on clause 113, regarding the focus of the commission and the work that it has undertaken. The clause refers to those national studies.

Clause 122

Andrew Stunell (Liberal Democrat, Hazel Grove)

I am sure that the Minister will recall that I raised serious concerns about the clause on Second Reading and I understand that he suggested earlier today that the Government might be having second thoughts about it. It, along with several others, is one of the most perplexing clauses in the Bill.

The clause takes away from the Audit Commission the capacity to assist local councils, or any other body that is subject to audit, in specific inquiries commissioned by that local authority. That seems quite perverse, and if the Government are having another look at it, that is overdue.

I have received information from the commission because I am interested to know exactly what the effect of this will be and who will be harmed if the clause is included in the Bill. It tells me that, in relation to its overall activities, a very small proportion of its turnover—about 0.5 per cent., I gather—is involved in those special studies. The studies are nevertheless quite important and, for those boroughs and organisations that have commissioned the commission at very low cost, have been good value.

As I asked a specific question, I understand that Tameside borough council has benefited from commissioning such a report. We have a Committee member who is on that council and he may later get up and say that, in his role on scrutiny, he has taken advantage of the work done for Tameside on transport services provided for those with special needs. Similar studies have been conducted in the London borough of Brent on the effectiveness of arrangements for management staff. Stockton borough council undertook a study on performance management in social services departments. The commission’s briefing to me said that

“this followed concern that children’s social services had received only one-star star rating when the council had clearly believed that things were better than they were”.

The council therefore asked the commission to come in, at a cost of £10,000 to the council. I understand that local Members of Parliament are aware of that study and believe that it achieved excellent results. The South Yorkshire police authority asked the commission to undertake a study of IT services and again a useful report was produced at a very low cost.

Five Durham districts— Derwentside, Chester-le-Street, Teesdale, Easington and Durham City—jointly commissioned a development plan to get some meaningful performance indicators for regeneration in the Durham county area, all of which seemed to be high value in terms of results and low cost in terms of the charge to the public purse. In other words, they are all of great value. Yet no such studies could go ahead if this clause is accepted.

It must be a challenge to the Minister to explain why on earth this step is being taken. Something that is simple, practical and beneficial to local government and causes no grief to anybody is being singled out for abolition at a time when actually, in other parts of the Bill, as we have discussed earlier, there is an intention to create more multi-body partnerships than ever before.

When the duty to co-operate is put into effect, there is no doubt that that will result in more joint commissioning of services. A number of issues have already been raised in this Committee about where the buck will stop, who will be responsible for monitoring and on how tight management control and value for money will be ensured—something perhaps delivered more easily by a single organisation than a multiple body. At exactly the time when we might expect something similar to the five Durham districts’ joint approach to the Audit Commission and when it might be very sensible for a new partnership to say that it needs the commission to run its eye over something, the clause will prevent that from happening. Will the Minister explain in clear terms what the rethink consists of and give us his response to my points, which I understand the commission itself feels should be taken into account?

Depending on the nature of the Minister’s assurances, or not, my colleagues and I might want to oppose this clause. It is only a small side issue, but one on which the Government have made the wrong choice for no discernable reason. We need to hear from the Minister on that.

Philip Dunne (Conservative, Ludlow)

I rise to support the hon. Gentleman’s comments. This is a peculiar clause. Earlier, the Under-Secretary said that the clause was somehow in conflict with the inspection role of the Audit Commission and its role in undertaking reports or studies. I fail to see how that conflict arises. I have more examples from my area of when the commission had been requested by a local authority to investigate an aspect of the council’s activity. It was in relation to a capital project when the overspend was substantial. South Shropshire district council, the local authority, had procedures in place for managing the capital project that were clearly inadequate. It accepted that there was a case for the commission to be asked to review its policies and procedures so that it could learn for the future how to avoid the problem.

The role was entirely appropriate for an external body to undertake. The Audit Commission, having the responsibility to audit the authority, was best placed to do it. Why should that be excluded from its functions for that apparent but, to my mind, non-existent conflict of interest?

We could envisage, for example, at some stage in the future the Audit Commission being invited to undertake a study into the project management role played by the relevant authorities in looking at the delivery of the Olympic games in London in 2012. The Under-Secretary may be able to put me right but, if my understanding is correct, by excluding an individual study by the Audit Commission of something like this, it might be excluded from undertaking such a role. That might be a controversial example and I do not want to sidetrack the hon. Lady into a debate about responsibilities for the delivery of the Olympic games. However, it helps to illustrate the point that there are some individual studies that the Audit Commission ought to be able to undertake and excluding them through the clause would be retrograde.

Angela Smith (Labour, Basildon)

I am grateful for those comments. The hon. Member for Ludlow was here earlier, so I thought that he heard my remarks about how we planned to proceed. I am sorry if he missed that. However, I accept that the hon. Member for Hazel Grove did not have the benefit of my earlier comments.

Philip Dunne (Conservative, Ludlow)

I was certainly was here and I heard what the Under-Secretary said. She said that the Government were considering what they would do. She did not say how she would amend the clause, although she acknowledged that she might wish to amend to it.

Angela Smith (Labour, Basildon)

I will endeavour to choose my words carefully to explain fully the Government’s intention. I say to the hon. Member for Hazel Grove, who said that he did not receive a satisfactory response to the issues that he raised, that I can give him an answer with which he will be happy. He considered voting against clause 122, which repeals sections 35 and 35A of the Audit Commission Act 1998. It allows the commission to undertake fee-paid improvement studies of certain bodies at their request or in some cases at the request of the Mayor of London.

Even if we decided to remove the commission’s power to undertake improvement studies under sections 35 and 35A, we would still need to repeal those sections as they overlap with the power to provide advice or assistance under paragraph 9 of new schedule 2A to the 1998 Act, inserted by schedule 11. I hope that the hon. Gentleman appreciates that clause 22 must be included in the Bill, regardless of the points that he makes. He said that he was perplexed at why the Government reached the view that they did. I can say that they are reconsidering the matter and hope to bring forward proposals at a later stage to deal with it.

As for being perplexed, I am worried about the hon. Gentleman’s comments on Second Reading. I can explain to the Committee why the Government thought carefully about the issue. It is finely balanced, and we concluded that we should rethink matters and change the Bill. However, the reasoning behind the original proposal was that there is a potential conflict of interest. The same body is offering improvement, support and inspection. It is effectively acting both as a critical friend and external regulator.

Andrew Stunell rose—

Angela Smith (Labour, Basildon)

I will not give way to the hon. Gentleman because I am sure that he will be satisfied by my remarks.

Concerns were expressed to the Government that that might lead some bodies to consider buying improvement services from the commission to obtain a better result at inspection. Commission inspectors could be called on to judge impartially improvement work carried out by their colleagues.

There is also a value for money issue. The Government fund the Improvement and Development Agency. We do not want the commission, which is also a publicly funded body, competing with the IDeA for such work.

The comments made on Second Reading and in Committee today resonate with us, and we take them on board. The Audit Commission has a role to play. When the commission was first given the powers, no other improvement organisations existed, so the situation was slightly different and we were content. We shall reflect on the concerns that have been expressed, rethink, and introduce proposals later to the Committee or the House to address it.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I thank the Under-Secretary. She is certainly moving in the right direction, although I should like her to move a little bit further. Can she confirm that the local authority that commissions the work will have a free choice—that they will not have to have the Audit Commission or the IDeA and that they can go to KPMG or any other adviser or supporter? Will she explain why the Audit Commission will be prevented from tendering, if that is the right word for such services, when others are free to do so and it is for the local authority to decide which will give the best results and return for the investment?

Angela Smith (Labour, Basildon)

The hon. Gentleman labours his point a little bit too much. I can confirm that that choice will be open to local authorities—he gets a bit hung up on KPMG and others, and I am not sure why—and that is the very reason why we are rethinking. I do not know how much clearer I can be, but I say to the Committee that we intend to return to the matter later to address the points raised by the hon. Gentleman and others.

Clause 125

Christopher Chope (Conservative, Christchurch)

With this it will be convenient to discuss new clause 4—Amendment of Local Government Act 2003—

‘Section 99 of the Local Government Act 2003 (c. 26) (categorisation of English local authorities by reference to performance) is hereby repealed.’.

Robert Syms (Conservative, Poole)

It is at this stage of the Bill that one forgets why one tabled amendments. Nevertheless, I suspect that it is because the Secretary of State’s element is so direct. That is what we object to in a devolutionary Bill. I should be grateful if the Minister said a little more about what impact the new clause might have on the legislation, and then I shall decide whether we will press it to a vote.

Phil Woolas (Labour, Oldham East and Saddleworth)

Although I hope to persuade the hon. Gentleman not to press it, new clause 4 is a useful device for debating the new performance regime. It is a good probing new clause.

Andrew Stunell (Liberal Democrat, Hazel Grove)

Even though he did not know it.

Phil Woolas (Labour, Oldham East and Saddleworth)

To be fair to the hon. Gentleman, I have the assistance of my hon. Friend the Under-Secretary. The hon. Member for Poole is without his hon. Friend the Member for North-East Bedfordshire, who we understand is detained on other parliamentary business. I say that for two reasons: first, because it is true, and secondly, because I may need him to say it to me later. I shall explain the change to the performance regime, because there is inevitably some jargon in such matters. New clause 4 teases out what has been talked about.

Formally, clause 125 will amend the requirement in section 99 of the Local Government Act 2003 for the Audit Commission to produce reports on its findings on local authorities’ performance in exercising their functions. The reports place the authorities into categories according to their performance—one star, two stars, three stars and four stars. Hon. Members will be familiar with that.

The forthcoming reform of the inspection of local services will mean a move away from rolling programmes of inspection that result in performances categories, which are currently known as comprehensive performance assessments. In future, inspection will be carried out according to risk. That will reduce the burden on better performing authorities and focus resources where improvement is most needed. In other words, inspections will not be carried out for their own sake; they will be carried out on an assessment of risk—something that I will go on to explain when we discuss the potential consequences of proposed new clause 4.

The changes to section 99 are being made because the current requirement for the commission to undertake a categorisation report into the performance league tables is too prescriptive and we wish to allow more flexibility. If a regular inspection based on performance is not carried out, it is nonsense to categorise every body as the Audit Commission is currently required by law to do. Clause 125 gives the Secretary of State a power of direction—the hon. Member for Poole was right to point that out, because it appears that the Secretary of State is taking rather than giving away a power. The Secretary of State is taking the power to enable rather than to require—an important distinction—the Audit Commission to undertake a categorisation report in circumstances where that is desirable and useful. In other words, if a council has been identified by the Audit Commission as not performing well, it is able to undertake a categorisation report in certain circumstances.

The categorisation will include the direction of travel, to use the jargon. The CPA reports from last week say that one council’s performance category has moved down, but its direction of travel is up. In layperson’s terms, a couple of years ago, the council was doing badly but has since started to improve. Two variables are in place, and the inclusion of direction of travel is a useful tool for focusing management and motivating staff.

There seems to be no correlation between the electoral performance of the majority party or the party in power and categorisation by stars. There is evidence of a correlation in some cases, but I guess that that is down to the whims of the electorate.

The proposed move to the comprehensive area assessment, which is a change from performance to risk assessment, and which draws on a wide range of evidence, means that a blanket categorisation report will not be required. New clause 4, as the hon. Member for Poole said, proposes changes to section 99, which currently obliges the Audit Commission to produce a report that sets out its findings. The commission has to carry out a comprehensive performance assessment to determine the categorisation of an authority. As proposed, new clause 4 will prevent the changes to section 99 that I hope I have convinced the Committee are desirable. The repeal of section 99 would remove the Audit Commission’s obligation to produce reports.

The new performance framework was set out in the local government White Paper. I emphasise that it came about as a result of substantial consultation that took place over two years; that it carries a cross-party consensus within the Local Government Association; and that it carries the support of the Audit Commission. The new framework, in line with the rest of the Bill, seeks to strengthen accountability to residents and communities by increasing choice that is informed by timely information, and by providing a means of redress for when things go wrong. The White Paper set out proposals for the introduction of the comprehensive area assessment in place of the comprehensive performance assessment. That means that in future, the area as well as the institution will be judged from the point of view of the resident or citizen. It is about the services—the outcomes—that are received. “Outcomes” is another of those jargon words that I hate, but it is common parlance so I am forced to use it.

The impact on the citizen is being judged as well as the impact on the institution, and the assessment is of the service received by the citizen, rather than the performance of the council. To judge the service received by the citizen, one has to inspect the bodies and institutions that are collectively delivering services, hence the comprehensive area assessment, which we hope and intend will provide for an assessment of an area. That will give the headline writers some copy, but that provision is more in tune with the needs of the citizen and will benefit them.

Finally, I should like to explain how the clause will enable the comprehensive area assessment and why new clause 4—a probing amendment—is not required.

Robert Syms (Conservative, Poole)

May I push the Minister a little on how he would define an area? Does he mean an area within a local authority? Is he talking about dividing the local authority into different areas because service delivery may be different in different parts of a local authority, or does he mean beyond a local authority?

Phil Woolas (Labour, Oldham East and Saddleworth)

It means the local authority area. A local authority area is not mentioned because it is not just the local council that delivers the service. For example, it is about looking at Poole as a whole and recognising that the hon. Gentleman’s constituents receive services from various sources commissioned or directly provided by the local council. As we all acknowledge, the citizen does not need to know, and does not much care about, the structures behind the delivery of that service.

The CAA comprises four elements, including an assessment of the risks in an area and how well those are being managed. For example, a consideration may be whether there is a risk of the refuse service collapsing.

David Burrowes (Conservative, Enfield, Southgate)

In relation to the comprehensiveness of the CAA, would it entail another tier of government, such as the Greater London authority, which covers my constituency, Transport for London and other bodies? From the point of view of the citizen, in respect of outcomes, they see what happens on the North Circular road as an outcome that needs to be provided, whether by the borough council or Transport for London.

Phil Woolas (Labour, Oldham East and Saddleworth)

The CAA covers services provided by or for the local authority. With regard to other bodies, the Audit Commission covers the GLA. It could include such a judgment of an outcome in the assessment of the GLA and the Mayor as well, but we intend it to do exactly what the hon. Gentleman says and consider the area. The citizen in his constituency does not really care who provides the maintenance on the North Circular. As somebody who used to cycle round it, I think it should be inspected.

Robert Syms (Conservative, Poole)

So in the case of Enfield there is an area agreement, but there would, presumably, also be an assessment of the GLA. The good burghers of Enfield would be able to see the area assessment for their area, but they would only be able to assess the GLA assessment on a London-wide basis and service delivery may be different in Enfield from that in Bethnal Green and Bow. Would it be appropriate, for an authority of the size of the GLA, to break down how a service is delivered in each borough?

Phil Woolas (Labour, Oldham East and Saddleworth)

The hon. Gentleman makes an important point, which his new clause has brought to light, which shows that even if one does not know what the intention of an amendment is, it can sometimes have beneficial consequences in shedding light on proposed legislation. He highlights a point that has been debated. The comprehensive area assessment does not cover the GLA, as he said. The Audit Commission can and will inspect the GLA separately, which then raises the point about the functions of the GLA or its delivery bodies within the area that is to be inspected. It is of course open to the commission to pass comment on that. What it cannot do is judge the performance of the local authority in respect of that area. It cannot hold the council responsible for the things that it is not responsible for, but it can, in its assessment, draw attention to the area and judge it as a whole. That is how better joining-up will come about.

Citizens, and therefore the inspectorate, do not care who is responsible for the services. They just want the problems sorted out. What one could not do is hold the council directly responsible for everything that goes on within the area. The hon. Gentleman puts his finger, perhaps inadvertently but with wisdom, on the very point of a comprehensive area assessment.

Let me finish the four points, and I said that I would be brief. The comprehensive area assessment is an assessment of the risk in an area and how well that risk is being managed. We all know that councils can have problems that they do not do anything about. That is significantly worse than a council that has a problem that it is trying to address. A judgment on the use of resources is crucial. Is it using its resources properly in respect of the functions? Then there is the pace and the likelihood of improvement followed by the report on performance against national indicators for each local authority area.

Those four judgments taken together will provide a simple assessment of performance in an area. That means that a blanket categorisation report is unlikely to add to the information about a locality, which is the information that builds up the picture of the CAA. The new framework, therefore, places greater emphasis on giving power to individual residents and their communities to require the personalisation of service delivery. That gives them more say in the running of local services and the right to propose suggestions or require action from their local authorities, notwithstanding the accountability assessment regime we see in other aspects of the Bill. We have talked about the best value duty in clause 106 and about overview and scrutiny. The framework provides another piece of the jigsaw.

Where the provision of clear, consistent and transparent information will help local people make an informed view of the quality of services, then provision should be made for such information to be made available. The new clause, which I urge the hon. Gentleman not to press, has brought out the opportunity for me to explain the purposes of the comprehensive area assessment and to explain to the Committee how the beautiful tapestry of Government policy is coming together to provide a new framework that will empower the people of this country.

Robert Syms (Conservative, Poole)

It has been a useful debate and rather more useful than I had expected. I am glad that the Minister has had the opportunity to put on record how he sees things unfolding. I beg to ask leave not to press the new clause.

Christopher Chope (Conservative, Christchurch)

The new clause is not being moved at the moment, so is the hon. Gentleman giving notice that he is not going to move it at the appropriate time?

Robert Syms (Conservative, Poole)

Exactly.

Christopher Chope (Conservative, Christchurch)

That is very helpful to the Chair.

Clause 127

Christopher Chope (Conservative, Christchurch)

With this, we may discuss the following: Government new clause 11—Appointment of auditors.

Government new clause 12—Inspection and disclosure of personal information.

Government new clause 13—Appointment of auditor to carry out agreed audits.

Angela Smith (Labour, Basildon)

I want take the opportunity to say something about the new clauses. It would be helpful to the Committee if I explain that new clause 11 will have been in section 3 (6) of the Audit Commission Act 1998. That Act requires all members of the firm appointed by the Audit Commission to carry out an audit to be members of specified accountancy bodies such as the Chartered Institute of Public Finance and Accountancy, which means they have to be qualified accountants. In reality, this provision is now out of date, as most firms are now multi-disciplinary partnerships and it would be difficult for every single member of that body to be a qualified accountant. This does not mean that unqualified staff will be able to undertake audits. The new clause retains the requirement in section 3(6) for membership of the specified accountancy bodies, but this will apply only to the person who is conducting the audit rather than all the employees of a firm, which makes common sense.

Michael Fabricant (Conservative, Lichfield)

Would that include certified accountants?

Angela Smith (Labour, Basildon)

As a former sixth-form student and not a certified accountant, I sought enlightenment on this and I can assure the hon. Gentleman that, having received such enlightenment, it does. The point is that they are fully qualified accountants.

New clause 12 amends section 15 of the Audit Commission Act 1998, which allows any interested person to inspect the accounts to be audited, plus all documents relating to them, such as bills, receipts, contracts and vouchers. We are concerned about the release of personal details of people who have had dealings with the council in a personal capacity, where they may have paid for a service or may have received benefits. These persons will have their personal details, such as names and addresses, the type of benefit and the nature of services received, on documents that are held by the council, which may then be available for inspection by other members of the public. This is not appropriate and the new clause provides that personal information that could identify an individual must be removed from documents prior to inspection by the public. A similar provision already exists for members of staff and we are merely extending that to every individual. There are some circumstances in which it may be desirable to disclose personal information, which may be used to ensure transparency—for example, relating to a contract or to a council’s expenses. Therefore, it is for the auditor to have the discretion to decide whether that information should be disclosed.

New clause 13 amends section 29 of the Audit Commission Act. Section 29 allows the Audit Commission to do the audit of accounts of bodies connected with local government or the NHS if such a body requests the commission to do so, and if the Secretary of State gives consent. However, the way this section is drafted does not reflect good practice. In practice, although the commission undertakes audits, in the majority of cases it appoints auditors to undertake audits on its behalf. The new clause provides that the commission may appoint an auditor to undertake audits under section 29.

I hope that I have explained the new clauses. I commend the clause to the Committee.

Clause 129

Robert Syms (Conservative, Poole)

I would be grateful if the Minister would take the opportunity to say a little about this clause. I know that we live in an age of devolution but we still deal with the primary part of legislation and it would be useful if he could set out how the arrangements are different for Wales.

Phil Woolas (Labour, Oldham East and Saddleworth)

I am grateful to have the opportunity to speak about clause 129, on the disclosure of information obtained by the Audit Commission or by an auditor. It repeals section 49A and amends section 49 of the Audit Commission Act 1998, which restricts the disclosure of information obtained by an auditor of the Audit Commission in the exercise of functions under the 1998 Act or under part 1 of the Local Government Act 1999.

The provision allows for a public authority or person acting on its behalf, as defined by the Freedom of Information Act 2000, to disclose information except when disclosure would prejudice the effective performance of any function of that authority. It also provides for an auditor to disclose information except when disclosure would prejudice the effective performance of his functions. It further provides for any other person to disclose information with the consent of the Audit Commission or an auditor. The commission and the auditor are obliged to give that consent unless disclosure would prejudice the effective performance of the functions of an auditor of the commission. I hope that that is as clear to the Committee as it is to the Audit Commission.

The clause removes the sanction of imprisonment for unlawful disclosure from the current provision. As the Committee will recall, clause 129 is in keeping with a previous commitment given to the House during the passage through the House of the Public Audit (Wales) Act 2004. Once again, the Government have fulfilled their promises to Parliament, though we were not prompted to do so by the hon. Member for Poole. I hope that I have answered him.