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Local Authorities (Overview and Scrutiny) Bill

I should say at the outset that I am taking the Bill through its remaining Commons stages on behalf of my hon. Friend the Member for Bury, North (Mr. Chaytor), and that is why I am speaking to this group of amendments. I should also repeat the declaration of a non-pecuniary interest that I made on Second Reading and in Committee: I am chairman of the Centre for Public Scrutiny, a body that promotes good quality scrutiny by public authorities. This large group of amendments all deal with the range and scope of the regime, and the extent to which the powers may be exercised by local authorities. In Committee, I accepted the importance of amending clause 1 to safeguard against potential burdens that may arise on designated bodies, in particular, to ensure that it does not have the unwanted effect of unduly burdening small business and charities. Throughout, we have been clear that this scrutiny regime must be proportionate. Amendment 1 builds in such safeguards for small business and voluntary or community interest organisations. It does so by requiring the Secretary of State to consider the potential effect on small business and voluntary and community interest organisations before making an order designating bodies as subject to the regime. The definitions in the amendment are generous. "Small business" is defined as""a business that employs fewer than 50 employees,"" and it is consistent with the definition in section 382 of the Companies Act 2006. Similarly, a "voluntary or community interest organisation" for these purposes means""an organisation…whose activities are carried on otherwise than for profit, or for the benefit of the community on the basis that any profits are reinvested in the business of the organisation for the benefit of the community."" That covers a wide range of third sector organisations, charities, voluntary and community groups and social enterprises alike. Taking those provisions together, the amendment would ensure that specific consideration were given to those specific groups. The hon. Member for Christchurch (Mr. Chope) seemed sympathetic to the amendment, and I trust that he will support it. Amendments 8 and 9 would simply serve to limit the scope of the scrutiny regime, rendering it less effective and less able to scrutinise matters of local concern. I am a little surprised that the hon. Gentleman has spoken to those amendments on behalf of the hon. Member for Putney (Justine Greening), because they are very inconsistent with the position that the hon. Lady adopted on Second Reading. The hon. Gentleman was not at that debate and will not be aware of what the hon. Lady said, so I shall remind him. She appreciated the Bill's intentions to give councils""much greater powers to scrutinise local public services,"" and she noted""a growing recognition that overview and scrutiny committees need to have powers over a wider range of external organisations as they become more involved in local public services".—[Official Report, 5 February 2010; Vol. 505, c. 524.]" That view is supported by the Local Government Association, which has noted that""much public spending…is in the hands of agencies with little or no democratic accountability."" It is also""pleased that this Bill proposes to strengthen the powers of scrutiny available to councils"." So, far from imposing unwanted obligations on councils, as the hon. Gentleman implied early in his speech, the Bill responds to councils' aspiration for a more coherent framework in which to scrutinise local services. I find it curious therefore that he seeks to adopt a contrary position to that which his hon. Friend took on Second Reading just a few weeks ago. Amendment 10 is otiose. It is simply unnecessary and would add nothing to the Bill. Amendment 6 is also unnecessary. The hon. Gentleman admitted that he had not discussed it with the hon. Lady, but had he done so and looked into it, he would have discovered that a "designated authority or person" is simply an authority or person designated by regulations made by the Secretary of State. Requiring the Secretary of State to revisit that designation every year would therefore have absolutely no purpose, and I hope that the hon. Gentleman will accept that the amendment is unnecessary. However, I am sure that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Stevenage (Barbara Follett), will be able to reassure us that, as a matter of course, the Government will keep under review the list of designated authorities or persons alongside that of the operation of the enhanced scrutiny regime itself. I think that the amendment's objective was to ensure a periodic review of the scope of the regulations and the organisations covered, and I am wholly sympathetic to that, so I hope that my hon. Friend the Minister will be able to provide such reassurance. Amendments 14, 16, 20 and 26 to 28 seek to subject to the affirmative procedure all regulations made under the Bill. The key issue in the operation of the regime is the designation of the bodies that will be subject to it, and that is what determines the scope of the new powers. I recognise that that power can be said to have special importance, and that is why, under the Bill, it is subject to the affirmative procedure. That approach was adopted to provide hon. Members with appropriate, ample opportunity to scrutinise and debate any designation prior to regulations being made. I do not, however, agree that the supporting regulations for the regime merit the same requirements. Those regulations will deal with some of the detail and technical matters relating to the operation of the regime, but there is no reason why they should be subject to a procedure that, as all Members know, is reserved for the most significant delegated powers, such as those creating new criminal offences. Furthermore, regulations will be made following consultation, and in Committee the Minister undertook that such consultation will take place. So, there will be an opportunity for people outside the House to have their say before regulations on those issues are drafted, and hon. Members will obviously be able to have their say as well. The negative procedure provides hon. Members with the opportunity to secure a debate if they are so minded; I remind the House that Members have not sought such an opportunity to debate similar supporting regulations, on proportionality and the operation of the scrutiny regime covering local area agreement partners, that were introduced by the Local Government and Public Involvement in Health Act 2007. It would seem inconsistent to seek the affirmative resolution in respect of the supporting regulations in the Bill. Amendments 17 and 22 would undermine the Bill's objectives; they would make it easy for any designated body or person to argue that their resource base was insufficient to comply with the requirements of the scrutiny regime. Like the previous amendments, they are also inconsistent with the view taken by the hon. Member for Putney on Second Reading. I quote her comments once again:""Overview and scrutiny committees perform an important function, reviewing policy and performance and holding local public service providers to account. Currently, those committees have the power to require information from a range of organisations including councils, NHS bodies, law and order bodies and partner authorities that are involved in local area agreements. The committees can also summon representatives of most of those bodies to appear before them, and they can require such officials to respond to reports and recommendations that have been issued to them. ""However, that does not happen with all bodies—for example, partners that are involved in delivering local area agreement objectives. Indeed, many other local bodies are not required to submit to the same level of scrutiny by local authorities, so their voluntary participation in scrutiny is not guaranteed."—[Official Report, 5 February 2010; Vol. 505, c. 524.]" The hon. Lady supported the Bill on Second Reading because it was creating a more coherent framework for scrutiny, and one without the holes that exist in the current situation. Unfortunately, the amendment would create another very large hole because it would allow any organisation—even the largest and most wealthy—to claim that it simply did not have the resources to attend a scrutiny hearing. I hope that the hon. Member for Christchurch will give further thought to that. Amendment 18 would add nothing to the current draft, which would see any description of persons in regulations by reference to their role. Given that existing scrutiny regimes provide for responses to scrutiny reports and recommendations within two months, amendment 21 would complicate the scrutiny landscape, leading to confusion in respect of not only scrutiny committees, but bodies subject to scrutiny in all its forms. Under some powers they would be required to respond in three months, but under others they would have to respond within two. That does not seem at all helpful. The two-month time frame for responses is already in place, under the Local Government Act 2000 and the Local Authorities (Overview and Scrutiny Committees) (England) Regulations 2009. Contrary to the concerns expressed in Committee about proportionality and the potential burden of the scrutiny regime, amendment 23—and I suspect that the hon. Member for Christchurch is not aware of this—would increase potential burdens on other bodies. The hon. Gentleman was having a little difficulty at that particular point in his speech, and I suspect that he had not grasped that amendment 23 would allow a series of different district councils in county areas to have simultaneous scrutiny of the same organisation. Clearly, that would impose an unreasonable burden. The purpose of the provisions in the Bill is to ensure that there is a proportionality and that within county areas where there are district councils as well as the county council, there should be a joint approach rather than separate scrutiny powers being available to all the separate bodies.