Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Dixon-Smith: My Lords, I am grateful to the Minister for the assurance that I may have some comfort. I can assure him that if I do not have comfort, neither of us will have comfort in a little while as events, uncomfortably, reveal themselves. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hamwee moved Amendment No. 5:

Page 18, line 18, at end insert--
("(3) Schedule 1 shall cease to have effect on 1st April 2005 unless previously extended by order made by statutory instrument and laid in draft before, and approved by resolution of, both Houses of Parliament.
(4) An order laid under subsection (3) shall not apply for a period exceeding five years.
(5) If an order laid pursuant to subsection (3) is approved, Schedule 1 shall cease to have effect on the date specified in the order subject to any subsequent order or orders approved by both Houses of Parliament none of which shall extend its effect for more than five years.
(6) Notwithstanding the provisions of subsection (3), if Schedule 1 has ceased to have effect it may at any time be revived by order made by statutory instrument laid in draft before, and approved by resolution of, both Houses of Parliament in which event subsection (3) shall thereafter apply.")

The noble Baroness said: My Lords, I move Amendment No. 5, which one may call the sunset clause for capping.

The views of these Benches are well known. We believe that the local electorate should take action through the ballot box to control council tax if it is not to its liking. It is not a matter for central government. The converse of that situation is that the local electorate has to rely on the ballot box if it believes that the administration of the local authority is not spending enough on its services so that they are not at the level and range that the electorate wants. I leave aside minimum standards to which we have already obliquely referred today.

Schedule 1 to the Bill and Clause 30 which introduces the schedule provide powers for the Secretary of State to cap local authority budgets. The amendment seeks to express what the Government say is the nature of those powers; in other words, they are to be exercised as reserve powers and only in circumstances where it would be clear and generally accepted that they should be used. I hope I do not misrepresent what the Minister said at earlier stages of the Bill. No doubt he will correct me if I have so misrepresented him.

The amendment seeks to provide that if the powers are not extended by affirmative resolution of both Houses they will cease to have effect on 1st April 2005. Thereafter, a similar procedure would apply. In an attempt to pre-empt an argument that the Government cannot know when they may need to exercise a reserve

15 Jul 1999 : Column 595

power, I have added a paragraph to the amendment which I proposed on Report, namely what would be Clause 36, to provide that the power can be revived by affirmative resolution if it has already lapsed.

We regard the capping of local authority budgets as wrong in principle, as I have said, and stultifying in practice. The Government have a programme to modernise local government and we would wish to see that as part of the programme to re-invigorate it. At other stages of the Bill and in the course of the Greater London Authority Bill, we have talked of the need for trust between the different spheres of government. It is no coincidence that the report of a Select Committee of this House, under the chairmanship of the noble Lord, Lord Hunt of Tanworth, three or four years ago, was entitled Rebuilding Trust. We have also talked about the need for freedom on the part of local authorities, including freedom to innovate, to experiment and, inevitably if they have those freedoms, occasionally to make mistakes.

In our eyes, the lowest expenditure may not necessarily be the best value for money. We want to see value for money arrived at as the local authority and its electorate see best. The Government are removing crude and universal capping--as they term it--or so they say. However, in our view, the legislation does not do that because it retains certain powers. If the Government regard reserve powers as necessary, we believe that they should be prepared to argue for their retention as the modernising programme proceeds. If they want to use the powers because a particular authority, or group of authorities, has used up its good will when the powers have been out of use, they should argue specifically for their application.

The Government are concerned to protect local taxpayers. Amendment No. 5 would not remove that right, but it would require the Secretary of State, in the circumstances that I have set out, to come to Parliament to justify his plans if he wishes to renew or to revive the powers. I beg to move.

Lord Dixon-Smith: My Lords, I rise to support the noble Baroness in moving Amendment No. 5. Everyone directly involved in local government, on whichever side of the House they sit, would welcome the sunset of capping.

It is superfluous for me to repeat the remarks of the noble Baroness. However, in supporting the amendment I want to refer to the whole of Part I of the Bill. With constantly improving efficiency and the provision of better services at lower cost--the two are not locked together--one can achieve a more efficient use of resources. That is best value. However, if we have had that regime in place for five years and if there is any validity in the efficiency factor which we were discussing on a previous amendment, it seems to me that, five years down the road, the whole concept of capping should be redundant, out of date and gone.

I accept that there may be individual authorities that may possibly not reach the performance level of the best performers. That will always be the case; indeed, it is a

15 Jul 1999 : Column 596

natural human failing. But if we have any confidence in Part I of the Bill, the need for Part II should disappear. As I said, I support the amendment.

6.30 p.m.

Baroness Miller of Chilthorne Domer: My Lords, I should like briefly to support my noble friend, yet not repeat what she said. The Government's willingness to include our amendment would be a statement by them that there is a milestone to be reached in the process of cleaning up local government where it needed it, and improving it where improvement was needed. The Government have been very pro-active. The improvement and development agency is very busy in its efforts to ensure that councils understand exactly what they have to do. We have two local government Bills which will change the attitudes of local government and improve civic leadership. There is also a big drive to forge a link between local councils and their local communities, where those links have been poor in the past.

However, if the Government do not feel after five or six years of this process that they will then be in a position to start to trust local government, in that it has built the links with its local communities and has a very rigorous programme of performance targets and indicators, that is a statement that the programme is unlikely to work. I would be the last person to say that; indeed, I think that the programme is both good and comprehensive and that five or six years is a reasonable length of time--over one council quadrennium--for it to work.

In Grand Committee, the noble Lord said that we cannot write in that date and leave local people open to the risk of some irresponsible council exceeding what would be a reasonable limit. I felt that that was a statement that all local authority regimes will continue to be driven by one or two irresponsible councils. We know that in the real world there will always be one or two councils which are imperfect, but we should not introduce for all time, and without an end date, a clause that penalises the others and cuts off their links with local communities. I say that because electorate can see what is going on. Indeed, the example of Milton Keynes this year was a good one. The council had made every effort to consult the people on what they wanted the level of their tax to be, but it still received a so-called "yellow card" from the Government.

If councils are going to make the effort to go out, put the best value plans into operation, have their communities fully on board with a very clear and accountable system of leadership and still be subject to government control of this sort, I think that the entire programme will be put on a much slower pace because local councils will not feel that the Government will ever trust them enough. I do not think that that is the kind of statement that central government means to make to local government.

Lord Whitty: My Lords, to begin with, let us be quite clear about the position. Once this Bill receives Royal Assent, the system of capping will have had its sunset clause. These are reserve powers, which are to be

15 Jul 1999 : Column 597

used in very exceptional circumstances. As both the noble Baroness, Lady Miller, and the noble Lord, Lord Dixon-Smith, said, the accommodation in the first part of the Bill in introducing best value and spreading it through local authorities, should avoid such powers ever being used.

Nevertheless, as I believe even the noble Baroness, Lady Miller, acknowledged, there are occasional improbabilities, exceptional circumstances--for which, in other contexts, the Liberal Democrats always seem to be advocating legislation--that we need to guard against on behalf of both council taxpayers and taxpayers generally; in other words, we need to guard against the unusual authority. Anyone who knows local government knows that change in local government proceeds at different paces in different parts of the sector. We do not know whether five years is a desirable period within which best value could deliver all these objectives; indeed, by no means will they necessarily be delivered. But, even if they have been, certain events, like management failures, and so on, could lead to a situation where it would be overturned.

Obviously we expect all local authorities to be reasonable, responsible and prudent, as well as operating best value to its full effect. However, we indicated in our commitment to avoid universal capping that we would retain a reserve power and also set that out in our manifesto. It is needed for precisely such an unusual eventuality.

I understand that the additional clause that the noble Baroness has now put forward, as compared with what was tabled at the previous stage, would revive the schedule if necessary and seem to provide such a safeguard after the five-year period. However, if we found ourselves in a situation the year after the provision had lapsed where there was a sudden reversion by local authorities to exceptionally bad practice whereby an authority would need to be designated for the financial year that had already started, timing would become very important. We would have to go through a debate in both Houses before we could introduce a designation procedure. That would make it much more difficult for the local authority to adjust to the fact that the designation had taken place and modify its budget during the financial year, if that proved necessary.

Of course, one could argue that if such a situation were envisaged the two Houses of Parliament should have debated the issue much earlier in the procedure. However, that would be before the Secretary of State had received any relevant information, which the local authority wished to draw to his or her attention. Under the existing capping legislation and under these powers, an authority that is designated or nominated may challenge the amount set by the Secretary of State. In doing so, it would provide information to the Secretary of State which, at that stage, might well lead to a revision of that view and a withdrawal from that position. In that case, it would not be appropriate for the Houses of Parliament to discuss the matter at an early stage. Therefore, we would be left with a situation, post-lapsing of these powers, where the requirement to

15 Jul 1999 : Column 598

re-introduce them would actually lead to serious delay. It would probably make a rare but difficult situation worse.

If we are concerned with the use of these powers rather than their existence, noble Lords must recognise that, where the Secretary of State decides to issue a restriction on any local authority, such an order would always be subject under these provisions to affirmative resolution in the other place. Therefore, although noble Lords may be objecting to the existence of these powers, their use is already constrained by parliamentary action. In fact, there are considerable restraints on the Secretary of State as regards ever using the powers. We believe that they are potentially necessary. We hope that we will never have to use them. We also believe that the first part of this Bill will create a situation and an ethos where we will not have to use them.

We do not think it sensible to commit ourselves to the automatic lapse of these powers in five years' time, with the presumption that they would lapse at that time. I do not believe that there is a time-scale in which one can say, "Beyond that, we will no longer ever have a totally irresponsible local authority". It is to be hoped that such authorities will be rare, but we need such powers to ensure that we have at least some restriction in that respect. I know that the noble Baroness has not previously accepted these arguments, but I hope that she will not feel it necessary to pursue the amendment tonight.

Next Section Back to Table of Contents Lords Hansard Home Page