Select Committee on Transport, Local Government and the Regions Minutes of Evidence


Examination of Witnesses (Questions 60-79)

CLLR SANDY BRUCE-LOCKHART AND MR NEIL KINGHAN

MONDAY 8 JULY 2002

Chairman

  60. If you have absolute transparency does that not make it easier for authorities to manipulate the results so that you get a good result rather than perhaps reflect reality?
  (Cllr Bruce-Lockhart) No, I do not think so. I think the key issue is about transparency and therefore having credibility within local authorities. I think anyone who is inspected will do their best, so I think that will apply anyway.

  61. Do you know in Kent how much all this inspection costs?
  (Cllr Bruce-Lockhart) Much too much. That is why I started off by saying that local government is in favour of total deregulation, including the 66 plans, including the variety of Government guidance and the inspection systems as well. Mr Kinghan may know the figure, the Audit Commission, over £100 million?

  Chairman: I was just after Kent. I was wondering whether you could have told me what you thought it really cost in Kent, including officer time, and then given us an example of what you could have provided with that money in Kent.

Dr Pugh

  62. Over to the brave new world of total deregulation. You do not like the rules on trading and charging altogether, do you, you would like to see further deregulation there. What kind of changes would you like to see? Trading and charging seem to be too restrictive.
  (Mr Kinghan) Our main point here is we are concerned about the procedures that some of the changes may have to go through. The super-affirmative procedure, which I will not pretend to understand in great detail, appears to take almost as long as primary legislation and if the intention is to provide for a simpler system of deregulation then something simpler than that would be desirable.

  63. There must be some regulation.
  (Mr Kinghan) I think we would accept that Parliament will want to approve changes that are made. This procedure—I am sure you know more about it than I do—does apparently take nine months and that is a long time to make change if there is a regulation which could be made relatively simply. There are quite a lot of areas where local authorities are restricted in their ability to charge at the moment. We have a list, which I could make available to the Committee if that would be helpful, which we think it would be helpful for local authorities to be able to make charges for. I quite see that Parliament would want to approve where those areas were to make sure that there were not things you did not approve of, we just think the procedures being proposed here are more cumbersome than they need to be.

  64. Okay. At the risk of sewing discord between the two of you, I think you have got different views on whether or not elected members should be given voting rights on scrutiny and review committees, is that correct? Would you like to enlarge on that? Harmoniously.
  (Cllr Bruce-Lockhart) I think the view of the LGA is broadly in favour. Speaking personally, I think that the accountability should be the democratic accountability and therefore I think it is probably not helpful, therefore I think I differ from the Local Government Association speaking for myself.

Chairman

  65. So basically you think if you have knocked on all the doors then you should have more rights than people who have just turned up?
  (Cllr Bruce-Lockhart) No, I am saying if you are scrutinising, let us say you are scrutinising the NHS which is one of the new powers given to local authorities, then I think it is right that you are democratically elected, it is a very important role. That does not mean that you do not have other people on the committee and listen to their advice.

Dr Pugh

  66. That is a very encouraging ringing endorsement for democracy. Can we now go on to the subject of the polls. You are allowed to conduct polls on financial matters but on very little else. Do you wish to see that power extended? If you do not, why would you not?
  (Cllr Bruce-Lockhart) I think that whole clause is confusing because quite a number of authorities have already gone down the road of having referendums on financial issues, council tax, options, so I think there is a question about how far the Bill needs to go. If a local authority wants to have a referendum I think it should be allowed to do so.

  67. A general power?
  (Cllr Bruce-Lockhart) Yes.

Mr Betts

  68. There was one issue in the previous conversation that still worries me. To what extent do you think the new freedoms on the ability to borrow will affect the use of PFI in local government? Do you feel in the end you will get back to Government getting its own way through the back door by saying "you can build a new school by borrowing, you can build it by PFI, but the preferred option is PFI"?
  (Cllr Bruce-Lockhart) I think that PFI, although it seemed a good idea in the first place, is immensely slow. It takes at least three years to get a PFI scheme together. It is an immensely bureaucratic and costly process for the local authority. There may be some advantages for the Government in that it does not feature, I believe, in the general public sector borrowing requirement but, from the local authority point of view, it would be much better to have prudential borrowing. Having said that, when we talk about prudential borrowing taking over from PFI and other forms, we would not want to see the present amount of capital grant reduced. Prudential borrowing would have to be an increase, we would not like to see prudential borrowing increased which capital grant is decreased.

  69. Is not the danger you are going to have freedom to decide how you want to pursue the capital side of these ventures but the grant which goes with it will be tied to particular forms of capital arrangements and the freedom will not be there?
  (Mr Kinghan) On the specific question of whether it will make much difference to the PFI, I think we are not clear is the honest answer. In due course we will need to see how much freedom—going back to our earlier discussion—really does come with the prudential system. If, contrary to Sir Paul Beresford's view, there is rather more freedom to borrow as a result and local authorities are able to use that in a way which begins to satisfy the sort of local needs that Sandy referred to earlier, then perhaps over time the PFI will reduce. Certainly it is the case that if the Government carries on funding PFI schemes then that will in itself provide an incentive for authorities to use them. Sandy said, also, it is pretty cumbersome at the moment and if authorities have a route which they see is simpler and is not as constrained as some members fear it might be then actually over time that may change.

Mrs Ellman

  70. You welcomed the freedom and flexibility promised to local government in the White Paper. What would you like to see changed in this draft Bill to bring about that freedom and flexibility?
  (Cllr Bruce-Lockhart) I think the plan side is extremely important. There are 66 plans which local authorities have to complete at the moment which are immensely time consuming and become immensely bureaucratic. Reducing those down from 66, some pilots are going ahead to reduce those just down to three but certainly reducing those down to less than ten I think would be very beneficial.

Sir Paul Beresford

  71. What about best value, could that be streamlined?
  (Cllr Bruce-Lockhart) It could certainly. I think most local authorities feel that best value has become extremely bureaucratic. Probably most successful local authorities in any case were conducting what many of them called 20 per cent reviews, simply as a normal course of practice. Having a regulatory regime which forces you to do that I do not think personally has added a great deal.

Mrs Ellman

  72. What about spending priorities? Does local government have enough freedom to set its own spending priorities?
  (Cllr Bruce-Lockhart) I think that comes back to the issue of specific grant. Specific grant has increased from four per cent five years ago to 14 per cent at least now and one of the most important things we would want to see is that reduced right back down to four per cent or so. That allows you to put forward local priorities.
  (Mr Kinghan) That does not require legislation, of course. On the whole the increases in specific grant have come about as a result of the Government choosing to do things differently rather than legislating. What we have suggested is that one of the outcomes of the spending review, which will be announced we understand next week, ought to be a commitment on the Government's part to reduce specific grants or ring fencing, as Sandy said, back to where they were when they took office.

  73. How important is it that an amended Local Government Bill becomes law? Does it matter?
  (Cllr Bruce-Lockhart) Yes, I think it does. I think things such as prudential borrowing and other freedoms and flexibilities, if this is, as the Government says, as the White Paper introduction says, about decentralisation and deregulation and giving freedom, and against a background of greater trust between Central Government and local government, then it is a step in the right direction.

  74. Is it urgent that the change happens?
  (Cllr Bruce-Lockhart) Indeed because I think it is right back to where I started, if you want to improve public services and increase local democracy then that deregulation and decentralisation must take place.

Chairman

  75. How soon do you need it to be on the Statute Book to affect spending in 2003?
  (Cllr Bruce-Lockhart) I think it would be helpful. No, it is unlikely to be there in time, is it not.
  (Mr Kinghan) It is not for us to determine the Queen's Speech obviously. If the Government is not going to introduce the Bill until the next session of Parliament, which is, we understand, what they intend, then I think it will be well nigh impossible for it to affect the financial year 2003-04 because it probably will not even be law by then. We said last year that we would have liked these provisions, or at least the ones we like out of these provisions, to be part of the legislative programme in the present session, in which case it could have been in place for 2003.

  76. As I understand part of the argument that is going on in Government is that there is a possibility of it being the first Bill in the Queen's Speech, if there is not too much that is controversial in it, it could be in place to affect the spending for 2003-04. So that means you have to have a fairly simple Bill without too much controversy in it. The alternative is that you have a bonfire of regulations, you have a whole series of other measures in it, the Bill expands and the opportunities to get it for April 2003 disappear. Which is better to get a big Bill that solves a lot of your problems or this relatively minor Bill through quickly?
  (Cllr Bruce-Lockhart) If you are asking whether we need a greater move towards deregulation and decentralisation then the answer is yes we do. We would like, certainly, to see the Bill going further than it is going now.

  77. Yes. That might mean then that you do not get it for April 2003, is that a price worth paying?
  (Cllr Bruce-Lockhart) I think you are asking whether a bird in the hand is worth two in the bush really.

  78. I am.
  (Cllr Bruce-Lockhart) I think that is hard to judge. If you were confident that greater freedoms are going to come forward then it would be worth waiting for.

Mr Cummings

  79. I believe that this Bill is a Bill of such magnitude, the likes of which perhaps we have not seen since 1974. I cannot recall in my time in Parliament such a far reaching Bill in its effects upon local government. Is there any reason why the Local Government Association has not submitted evidence or suggestions in relation to the local councillors' allowances, their severance pay or indeed pension provisions?
  (Cllr Bruce-Lockhart) I thought they were largely dealt with in the Local Government Act 2000, perhaps I am wrong.
  (Mr Kinghan) I am not an expert on those issues. I think our approach has been to argue that a Bill of this kind should be introduced as soon as possible. Going back to the questions the Chairman was just asking, there is always a balance between how much you try and add to a Bill and whether or not you try and get it through quickly. There are a number of things we would like to see in the Bill—


 
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