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Baroness Hamwee moved amendment No. 76:


(" . The provisions of Appendix 1 of Department of the Environment Circular 16/92 shall, with effect from the enactment of this Act, extend to persons whose pecuniary interest arises solely from holding a lease of a residential property.").

The noble Baroness said: My Lords, this is the first of two proposed new clauses. Noble Lords will not be surprised that the Bill is being used for some moderately tentative exploration as to whether a couple of local government issues might be dealt with in the context of the Bill as we have the opportunity.

The first is the question of pecuniary interests. Noble Lords will be aware that members have a duty to declare a pecuniary interest in a matter which is being debated, to take no part in the consideration of the matter, and not to vote without the dispensation of the Secretary of State. There are, as I understand it, three general dispensations: for members of local education authorities whose children are in full-time education; for members who are considering questions concerning the payment of statutory sick pay; and for members who are tenants of unfurnished accommodation. The last is the relevant dispensation.

The circular referred to in the amendment allows those tenants to take part in proceedings when a pecuniary interest arises from a tenancy, contractual or statutory, of a dwelling that has been let unfurnished. The dispensation is not unlimited. It extends only to considering, discussing and voting on matters concerning housing function affecting the whole or a part of the area. It does not apply when the pecuniary interests of the member would be different from those of a significant number of tenants who are not members, and it does not allow a member to vote on rents when the member's rent is in arrears for a given period.

My point is a short one. I appreciate that it is possibly not appropriate for primary legislation; nevertheless, I believe that it is worth raising. It is that, after many years of the right-to-buy, there are fewer tenants--given the transfers that have taken place, there are also fewer tenants of local authorities--and more leaseholders. There are occasions on which an authority must consider matters affecting the general body of its leaseholders and where their position should be on all fours with those of the local authority's tenants. The purpose of this amendment is to ask the Government whether they might consider extending that exemption and in effect bring it up to date. I beg to move.

Baroness Farrington of Ribbleton: My Lords, the noble Baroness has identified the fact that the existing rules on registration and declaration of interest and the corresponding general dispensations are rather complex. They are made up of a varied collection of guidance, regulations and statutory instruments and are potentially confusing for councillors. The issue needs addressing so that the rules can be clarified and simplified.

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Under the new ethical framework, we are proposing that the rules on registration and declaration of interest should become part of the code of conduct for members. Alongside this, we have already made provision in Clause 67 for the standards committee to take on the role of considering dispensation requests. Where it remains appropriate, we would envisage that any general categories of dispensation, such as the one to which the noble Baroness has drawn attention, might also be covered in the code of conduct. As a consequence, we intend to bring forward suitable amendments at a later stage to repeal or disapply the existing legislation.

The amendment raises a useful question about the types of interest where a general dispensation may still be required that we shall need to consider in developing the code of conduct. Because the existing rules are to be repealed, the amendment will prove unnecessary. I therefore hope that the noble Baroness will feel able to withdraw it.

Baroness Hamwee: My Lords, that reply is helpful in explaining the Government's approach. I hope that the position of leaseholders will be covered in an appropriate fashion. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hamwee moved Amendment No. 77:

    After Clause 77, insert the following new clause--

Payments etc. in cases of maladministration

(".--(1) In section 31 of the Local Government Act 1974 (Commission for Local Administration: Reports on investigations: further provisions), for subsection (3) substitute--
"(3) In any case where it appears to an authority that a person has suffered injustice as a consequence of maladministration by that authority, following--
(a) an investigation of a complaint by that person by the authority, using the complaints procedure of that authority; or
(b) consideration of the possibility of a local settlement of a complaint by that person to a Commissioner for Local Administration; or
(c) consideration of a report laid before that authority under subsection (2) or (2C) above;
and that, as a result of that injustice, it appears to the authority that a payment should be made to, or some benefit should be provided for, that person, the authority may incur such expenditure as appears to them to be appropriate in making such a payment or providing such a benefit."").

The noble Baroness said: My Lords, this is the second of my proposed new clauses raising matters allied to the Bill but not directly dealt with by it. The purpose of the amendment is to deal with the issue of compensation to a complainant.

Currently, a local authority is allowed to incur expenditure in making a compensatory payment only if the ombudsman has made a report on the complaint and has found injustice arising from maladministration. The various authorities involved would like to see legislative provision that would allow

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local authorities to make such payment in circumstances where the authority itself believes that there is justification for the complaint and that compensation would be appropriate. I understand that there is a good deal of uncertainty as to whether authorities actually have the power to make payment in such circumstances.

The kind of situation I am suggesting is, for example, where a complaint has been investigated under the authority's own complaints system and the authority has found the complaint to be justified without the matter being taken to the local ombudsman; or where settlement is negotiated locally after a complaint has been made to the ombudsman but before the ombudsman has made a finding of maladministration causing injustice. ombudsman but before the ombudsman has made a finding of maladministration causing injustice. That would encourage local authorities to settle complaints at local level wherever possible, provide a speedier resolution for complainants and also save resources, because the council and ombudsman would then be left to concentrate on the more difficult cases. I am sure that all noble Lords would encourage councils to have robust internal complaints systems. I hope that the Minister can help us to overcome the uncertainty about the payment of compensation in the situation that I have outlined. I beg to move.

Baroness Farrington of Ribbleton: My Lords, the amendment moved by the noble Baroness would help to overcome any uncertainty as to whether the powers that she seeks already exist. We are aware that the amendment has the full support of the LGA and the Local Government Ombudsman. The Government support the efforts that have been made to encourage the local resolution of complaints. Ideally, complaints should be capable of local resolution with recourse to an ombudsman very much as a last resort. Where there are unnecessary obstructions to local resolution the Government fully support taking action. We need to consider how cases of misconduct, which also involve maladministration, that appear before the standards board should be treated and whether there should be consistency with those cases that are dealt with solely by the ombudsman or the authorities themselves.

Perhaps I should alert the noble Baroness to a point raised by our legal advisers about whether such an amendment is within the scope of this Bill. We wish to consider this matter further and may be able to return to it at a later stage. I hope that the noble Baroness feels reassured and is able to withdraw her amendment.

Baroness Hamwee: My Lords, I hope that the legal advice will come down on the side of the matter coming within the scope of the Bill. Given that the Long Title says no more about standards than that the Bill is intended to make,

    "provision with respect to the functions and procedures of local authorities",

I believe that the points I have made fall squarely within that terminology, as does the whole of Part III

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of the Bill. More expert legal minds than mine will be brought to bear on the matter. I am grateful for the Minister's response. Perhaps we can keep in touch on this matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.45 p.m.

Clause 78 [Grants for welfare services]:

Baroness Maddock moved Amendment No. 77A:

    Page 53, line 39, at end insert (", or

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