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Lord Filkin: My Lords, I support the amendment proposed by the noble Baroness, Lady Hamwee, and regret that I cannot support the amendment tabled by the noble Lord, Lord Dixon-Smith.

The issues have been before the House, and previously the Joint Committee, since May last year. Seldom has a Bill had so much careful and thorough consideration. During that period the Bill has considerably changed and adapted. That has been as a consequence of the arguments in favour of adjustment made from Members on all Benches in this House. Perhaps I may rapidly remind them of that.

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First, the area committees are a valued and important part of local government structures and therefore need to have a prominent role in legislation if councils so wish them. Secondly, access to information was an area of concern to some Members. That has been recognised in another place and there will no longer be concerns that executives might be excessively secret. Thirdly, the major amendment proposed by the noble Baroness, Lady Hamwee, allows small districts, if they wish, to exempt themselves from the full separation of functions. They do not have to do so if they do not want to. That is a massive change which, it is to be hoped, reflects the eloquence of the arguments rather than the expediency of the Government in wanting to get the legislation through before the Summer Recess.

I want to mark two aspects on which I invite the noble Lord, Lord Dixon-Smith, to reflect further in deciding whether to press his amendment. The first is the argument that the provisions put power only in the hands of a small cabal of people and that the rest of the council is denuded of influence or role. I do not believe that the evidence supports that, particularly in the light of the guidance issued by the department and heavily consulted on across local government.

The role of the council is, first, to approve the constitution of that body. Secondly, it is to approve the budget, including the capital budget, of the authority. Thirdly, it is to be able to approve any variations to the budget that the executive wants to make. It cannot make variations without the prior approval of the council. All statutory plans, and a wide range of non-statutory plans, have to be decided by the council and not by the executive. The executive proposes, but the council will decide. There is a clarification of powers of the council which, in some cases, go considerably further than exist at present in some authorities. So in some authorities, there will be a strengthening of the powers of the council rather than a diminution.

The final point is the affirmation of the importance of scrutiny. The Bill is as much about strengthening scrutiny in local government as it is about developing executives. Perhaps your Lordships will bear with my repeating what I said at previous stages, but I missed out on scrutiny during the 30 years I served as a local government officer. I did not see much of it taking place, but the Bill will reverse that. More scrutiny is essential to the health of local government.

The second aspect is the argument that there is no need for change; that things are all right and should be left alone. Yet 30 years ago the Maud committee was highly critical of the way in which the traditional committee system worked. Some 10 years ago the Audit Commission stated that we cannot carry on like this, yet we have done so. In 1993 the local authority associations--which the noble Lord, Lord Dixon-Smith, had the honour to lead and which I had the honour to serve at some staged--worked jointly to examine the current model and recommended that it could not persist in its current form and had to be changed.

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After more than a year of debate the Society of Local Authority Chief Executives and the Local Government Association state clearly that we must move forward and make these changes. Most local authorities say the same. They recognise that during that period a remarkable amount of development has taken place within local authorities. I compliment many Conservative and Liberal Democrat-controlled councils which have pioneered the arrangements. They want to get on with them and do not want to see further hesitation or messing about. They have seen the progress that has been made, in particular in your Lordships' House, as a result of the amendments made to the Bill.

Finally, the legislation, as amended by another place and brought before us today, allows a massive range of variation in structures and options. It allows more variations than did the Bill when this House last considered it. It should also end the current practice as regards decision making. It does not take place in transparent open forum in councils, but in a small leadership clique which is not usually open to scrutiny or challenge if such decisions are supported by a majority group. We must sweep away that old-style form of local government politics which was not subject to debate, challenge or scrutiny. I have to say that were the amendment tabled by the noble Lord, Lord Dixon-Smith, to be carried, it would perpetuate that form of practice which would not serve local government well. I believe that most Members of the House want to see a stronger system of local government and to see central government treating it more seriously than did the previous administration, and perhaps this Government. Regrettably, the best way of ensuring that those who do not want local government to have a significant place in the future would be to support the amendment standing in the name of the noble Lord, Lord Dixon-Smith.

The Earl of Carnarvon: My Lords, I was a member of the Joint Select Committee dealing with the draft Bill and pressed for more flexibility from the Government. In Committee, the noble Baroness, Lady Hamwee, and I again pressed for more flexibility. I believe that the Government have reacted to that argument for flexibility and, much as I dislike not standing shoulder to shoulder with my colleague, the noble Lord, Lord Dixon-Smith, as has been the case for many years, I shall in this instance support the amendment tabled by the noble Baroness, Lady Hamwee.

Lord Hanningfield: My Lords, I support the amendment tabled by my noble friend Lord Dixon-Smith. I must contradict the Minister because the Local Government Association does not support the amendments. I am vice-chairman of the association and at this time perhaps I, rather than its chairman, might be able to speak for its majority.

The LGA discussed the Bill last week and although it supports most of it, it does not support the rigidity of the executive/non-executive split. We do not

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support the idea of two classes of councillor. Last week, the majority of members, including the Liberal Democrats, supported that line. If they have changed their minds, that is new and we have not discussed it at a meeting of the association. Therefore, the association would be against the amendments. I must speak for the Local Government Association and it is wrong that the chairman can speak for us at this stage. At the recent local government conference, the Minister responsible for local government received a slow handclap from the Liberal Democrats when she tried to present the proposals. I am surprised by the amendments the party has tabled today.

I am the leader of Essex County Council. It is one of the largest authorities in the country. It is larger than many American states and EU countries. Three months ago, in conjunction and co-operation with the other two group leaders, we introduce a pilot scheme. For three months we have been operating on a cabinet:select committee split. We have established five select committees and we have put all our members on two select committees in order to try to involve them. I am the leader of the council, so I have a nice job; I am the executive. I have eight portfolio members and we are taking the decisions of the council. But my colleagues from all parties are most unhappy. Indeed, the Labour members are more unhappy than any of the others. They feel totally dissociated from the decision-making processes within the council. A revolt is taking place because they hate the system.

I beg your Lordships to take more notice of the unhappiness in local government. It was divided over local government reorganisation but it is even more divided over this issue. We cannot have two classes of councillor. It is all very fine for executive members. We have 79 councillors: eight of them have a fulfilling role, but 71 are now sidelined. I beg your Lordships to review the matter and to think again before we pass these amendments. It is all very well for 86 councils to be excluded from the new system.

I was contacted by Rushmoor--a small district council with a population of 86,000. There will be dozens of such councils which are excluded from the new system. What about poor Rushmoor, which wants to have its own system? I can see that the arbitrary figure of 85,000 will be subject to judicial review and all kinds of arguments for many years to come. I beg both the Government and the Liberal Democrats to think again because this will be a most divisive system.

We all agree that we should speed up the processes of decision-making. I am the first to agree with that, and I am the first to agree that we cannot stand still. In Essex we have never stood still. We need to review our practices and to modernise our councils. No one disagrees with that. However, having an arbitrary line between two types of council is so divisive that we should try to avoid it. Therefore, I beg noble Lords to support the amendment of my noble friend Lord Dixon-Smith.

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4 p.m.

Lord Hooson: My Lords, I am no authority on local government and my sole purpose in intervening is to seek clarification. As I understand it, the amendment of my noble friend Lady Hamwee clearly spells out the matter. It limits the powers of a council with a population of under 85,000 to seek relief under Clause 28.

I want to ask for clarification of the position of a council in Wales--my own council, Powys County Council--which is approximately 140 miles in length. It covers 2,000 square miles but its population is 123,000. I do not suppose that there is a comparable council in England. It is run entirely on a shire committee basis with supervisory control. One councillor has to travel 70 miles back and forth to the county town.

Will the limit of 85,000 apply in Wales or will it be open to the Welsh Assembly to make an exception with regard to a council such as Powys County Council, which is run entirely on a non-party basis? I do not believe that there is any grouping of parties there. Therefore, the need for flexibility cannot be demonstrated better than by the need of Powys.

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