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Mr. Clifton-Brown: The Minister failed to answer my question about the recycling aspect and the premium that will have to be paid for a high-interest loan. We take it that he has no answer, and that it is merely recycling.
The Minister sailed into an uncharacteristic, politically partisan pose when he said that I accused northern Conservative-run authorities of being badly run. It is necessarily not right that, because it has gone into debt, the housing function of a local authority has been badly run, but we know of instances of Labour-controlled authorities—Liverpool under Derek Hatton, for example—that have got themselves into huge debts because they were grossly inadequately run.
The clause is unfair. Why should capital receipts from well-run and debt-free authorities be pooled, when the debts of highly indebted authorities are being written off anyway? Are we not just robbing Peter to pay Paul when the Government have already paid Paul? I will urge my colleagues to vote against this arbitrary and unfair clause, which gives a huge incentive to highly indebted housing authorities to transfer their stock for someone else to run. They should do a better job in the first place.
Mr. Swayne: I acknowledge that the Minister addressed my question, but he did not answer it. Is he suggesting that the board is under the same constraints as a bank would be in determining the nature of its loan book and perhaps resisting the customer's determination to pay off their mortgage early? Is it the same sort of provision?
Mr. Raynsford: Yes.
Question put, That the clause stand part of the Bill.
The Committee divided: Ayes 13, Noes 6.
Division No. 10]
AYES
Borrow, Mr. David
Caton, Mr. Martin
Cruddas, Jon
Davey, Valerie
Gilroy, Linda
Hall, Patrick
Iddon, Dr. Brian
Leslie, Mr. Christopher
Quinn, Lawrie
Raynsford, Mr. Nick
Sawford, Phil
Touhig, Mr. Don
Woolas, Mr. Phil
NOES
Clifton-Brown, Mr. Geoffrey
Curry, Mr. David
Goodman, Mr. Paul
Swayne, Mr. Desmond
Syms, Mr. Robert
Turner, Mr. Andrew
Question accordingly agreed to.
Clause 40 ordered to stand part of the Bill.
Column Number: 298
Clause 41
Payments towards local authority indebtedness
Question proposed, That the clause stand part of the Bill.
Mr. Turner: I should like to assume that many similar points would have been made in debating this clause as were made during the debate on clause 40. I make that presumption in order to save time, but hon. Members may wish to intervene if it is untrue.
I wish to return to some of the answers that the Minister gave to some of the questions that were asked about clause 40 and to apply them to clause 41. I thank the Minister for the good answers that he directed to me on the income stream, even though they were answers not to my questions but, I suspect, to those of my hon. Friend the Member for New Forest, West.
In order to save time, I will not repeat my speech on clause 40, but I ask the Minister to go back over it and to assume that it was made in reference to clause 41. I wish him to explain how local authorities have got themselves into a position where they need to have debts written off. I understand the more recent history of that topic. My hon. Friend the Member for Cotswold referred to local authorities—some of them are Conservative-controlled councils—that have large debts because they have recently taken control of hitherto badly run local authorities, and my hon. Friend the Member for New Forest, West mentioned other local authorities that have failed to invest sufficient sums in the maintenance of their capital stock. Can the Minister tell me whether these authorities have a history of either having a large surplus or a particularly badly maintained public housing stock which has led them to need—or to feel that they need—to transfer the stock with a large overhanging debt? I ask that because I have a genuine desire for more information on it. Can he give the Committee additional information on why this clause might be necessary, in the context of the remarks I made in the previous debate?
Mr. Raynsford: I am sorry that the hon. Gentleman did not listen more closely to earlier debates, because if he had done so he would know that authorities in areas of low capital value will not have the same opportunity as those in the southern areas to raise large capital sums through the sale of assets. That problem will be compounded if they have also incurred substantial debt that they are still servicing through the need to invest in housing over the years. That is of no relevance to the quality of the management of the stock. Those matters are to do with the market and the cost of providing housing. In some cases, individual authorities have not managed their stock well, and that may be an added reason why they wish to transfer to another body. In other cases, they will have done that very well, but cannot counter the market factors that I have described and which make it impossible for them to gain sufficient sums from the disposal of the asset to write off the outstanding debt.
We have made proper provision to ensure that there is fair treatment for authorities in all parts of the country, irrespective of the capital values that apply in
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their areas and of whether the housing stock has been managed well or badly. I hope that the hon. Gentleman will recognise that his anxieties and fears are groundless. This is a sensible provision and I hope that he and other hon. Members will agree that clause 41 should stand part of the Bill.
Question put and agreed to.
Clause 41 ordered to stand part of the Bill.
Clause 42
Local government finance reports: Wales
Question proposed, That the clause stand part of the Bill.
Mr. Clifton-Brown: I seek your guidance, Mr. Conway. Clause 42 is the paving clause and schedule 2 provides the detail, so would it be in order to debate the two together, even if we have to take any votes separately, if it comes to that?
The Chairman: Yes. I should be relaxed about that, if it enables the Committee to make progress.
Mr. Clifton-Brown: That is very helpful, Mr. Conway.
Clause 42 is the paving clause, which provides for local government reports for police and other authorities in Wales. Schedule 2 is important because it sets out the entire financing provision made by the Welsh Assembly to each Welsh local authority. I want to ask the Under-Secretary of State for Wales several questions. How will the Welsh Assembly set out its proposals, publish them, pay for them, recalculate them and amend them? The schedule does not appear to include any power of appeal for local authorities, but surely there must be an appeal mechanism or some form of consultation to put right any mistakes made by the Welsh Assembly because it will not get it right in every case. Some mechanism is needed whereby each local authority can make additional representations once the financial settlement has been published. Finally, will bodies have recourse to the High Court for judicial review against decisions of the Welsh Assembly with which they are aggrieved?
Mr. Touhig: Clause 42, which introduces schedule 2, is an important part of the provision in relation to Wales. The Welsh Assembly gave a commitment, in its policy statement on local government freedom and responsibility, to look at ways of continuously improving the publication timetable of local government finance reports. As a former councillor and chairman of a finance committee in my county, I certainly appreciate that.
One of the ways of achieving that policy objective is to provide an option for the Welsh Assembly to produce one report for police authorities and one report for other authorities and bodies. That is because waiting for information about police funding to become available from the Home Office often delays the publication of all authority reports until the end of January. In my experience, that has certainly been the case. That option will meet the Assembly's policy
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objective and provide greater certainty and stability for police authorities in Wales.
The hon. Gentleman asked several questions about the provision. In particular, he asked how the budget would be paid for. Of course, the Government provide a block grant to the Assembly, which covers all its expenditure, and, under its own arrangements, the Assembly determines what its budget will be. Each year, the Assembly Finance Minister presents a budget to the Assembly, which is debated and approved by the Assembly in a two-stage process—a preliminary presentation and a final budget—so the whole process is transparent. As in other parts of the country, negotiations take place between local government associations and the Assembly Administration about what support for local authorities should be provided.
On the question of appeals against decisions of the Assembly regarding allocations to local authorities or the police, discussions tend to be ongoing. When I was sitting on the other side, as a local council finance chairman, I was often unhappy with the settlements that were agreed, especially when the hon. Gentleman's party was in power and when one particular Secretary of State held office. We tried to reach agreement, but ultimate responsibility then lay with the Government—it now rests with the Assembly—to determine local government expenditure. There is no formal structure of appeal against decisions of the Assembly.
Mr. Clifton-Brown: The only point that the Minister did not answer is whether individual bodies will have the right to go to the High Court for judicial review.
Mr. Touhig: I cannot honestly answer that question. An authority should consider such a review if it feels that it has been unjustly supported or funded by the Assembly at any time.
Mr. Clifton-Brown: With respect, the Minister has answered a different question. I asked whether each body would have the right to a judicial review, not whether they should seek one. Will there be a procedure in which they have the right?
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