Procurement Bill [HL]

Earl of Lytton Excerpts

Committee stage
Monday 4th July 2022 Grand Committee

[Lord Moylan (Con)]

You could have more of me, my Lords, but I will simply say that I know nothing about ports. However, I know a little about airports and they are technically subject to economic regulation by the Civil Aviation Authority. It is true that that authority has, through its own risk assessment, decided that only Heathrow Airport will be subject to full economic regulation. Gatwick and Stansted are subject to some, while most other airports are not economically regulated; that is, they can set their own charges and if people do not want to fly into their airport, they will fly to another. It is not entirely true, it is fair to say, that where it matters airports are not economically regulated, because they are. I suppose that the Civil Aviation Authority could always reverse its decision, if it saw fit. It has the power to expand economic regulation to other airports if that were felt necessary. Having added that, I shall subside and look forward to my noble friend’s response.

[The Earl of Lytton (CB)]

My Lords, this is my first intervention on the Bill because on the day of Second Reading I was convalescing at home and not allowed to go anywhere.

On this business, regarding utilities, I am afraid I come at this from a simple property professional’s standpoint. It always used to be gas, water, electricity, drainage and telecoms; those were the utilities on which people relied for the use of buildings and property of all sorts. We seem to have dropped drainage, for reasons I cannot quite understand, when it is merely the dirty-water function of the clean-water provider of drinking water, which is referred to.

I declare my interest as one of those who serve under the chairmanship of the noble Baroness, Lady Neville-Rolfe, on the Built Environment Committee, as do the noble Lords, Lord Moylan and Lord Berkeley. I am very privileged to do that. Last week, when we were talking about the Product Security and Telecommunications Infrastructure Bill, it was noted that the very purpose of the telecoms giants was to try to convince government that they were a utility, should have utility powers and should, encompassed in that, have certain powers of coercion. They have come into that from the private sector, whereas dear old British Telecom, aka Openreach and a few other things, has come at it from the other direction—the hardwired traditional utility standpoint that was protected, with all sorts of powers to acquire wayleaves and so on.

The noble Baroness referred to imperfect policy development. I almost got up and said “Hear, hear” to that, because we need to start sorting out what exactly we mean by these utilities that look in lots of different directions. Some of them are very commercial—some are very controversial—and others come from a highly and necessarily regulated background because they are important for health, stability and all sorts of other basic things that require regulation as to quality and quantity in the essential needs of the public. It is not so much the voluntary needs, and perhaps even less the voluntary needs of business, but the essential needs of the public.

We seem to have an increasing muddle between what may be regarded as that essential element that has to be regulated for the purposes I have suggested and the wider commercial endeavour that goes with it. Because that distinction has been made ever less clear, for reasons that I perfectly understand—the utilities were privatised for reasons to do with funding, and I do not pass judgment on that—like Voltaire’s Candide I stand here noting both cause and effect. This is exactly the situation we are in; utility activities are mired in this very issue. I look forward very much to the Minister’s answer on that. He has a great grasp of these intellectual refinements, and I hope he will be able to enlighten us. I think a bit of a distinction needs to be made here between essential purposes and processes that are essentially voluntary and commercial.

[Lord Fox (LD)]

My Lords, I am sure the Minister will pick up on the noble Earl’s Voltaire reference and tell us that we live in the best of all possible worlds. In my previous intervention, I mentioned the Government’s productivity. The noble Lord, Lord Moylan, appears to be spoiling that, trying to do in two Bills what the Minister is trying to do in one. I think one Bill on this may be enough.

The point raised by the noble Lord on utilities, developed by the noble Earl, is extremely pertinent. It is a wider question that spreads into things such as the Building Safety Act, for example, where there is an assumption that utilities have a particular role to play. Are hardwiring, broadband and things such as that utilities or not? There are wider implications in this than simply the nature of the Bill. There are questions to be answered.

There is also a precedent already forming in the Bill about public services being carved out. That is the NHS issue, of course, where separate legislation is pulling out some aspects of the jurisdiction of this Bill. I do not expect to have that debate on this group, because the Minister has helped us to move everything into one group. We can have that debate later, but the principle of carving things out has been accepted by the Government. In that respect, the tablers of these amendments have something to go on. The interesting question they are providing through these amendments is: what is in and what is out? In a sense, that covers part of our curiosity around the Bill.

We should not be too obsessive about this, and nor should the noble Lord opposite, because Clause 109,

“Power to amend this Act in relation to private utilities”,

allows the Government to turn the whole thing upside down anyway. Clause 109(1) says:

“An appropriate authority may by regulations amend this Act for the purpose of reducing the regulation of private utilities under this Act.”


In fact, none of this debate makes any difference because, by regulation, the Government can ignore themselves in any case. We already have a problem, Houston.

The noble Lord talked about the difference between private delivery of services and the noble Baroness, Lady Neville-Rolfe, talked about the fact that these organisations took on risk. With the train operating companies, when the risk turned around they just surrendered their licences. It is not real risk in the sense we might understand it in the private sector; it is a different world.

For that reason, I find it very difficult to go along with the amendments that try to extract private delivery of public service from the Bill’s ambitions. Large sums of money that have, lest we forget, originated from the pockets of UK citizens in the form of tariffs, fares or subsidies are then disbursed, or potentially disbursed, by the private companies as they procure things to deliver from their private sector the public services they are pledged and allowed by licence to supply. The Bill may, as the noble Baroness, Lady Neville-Rolfe, set out, interfere with the board’s licence to operate on a wider scale when it decides how to go about making purchases, but that is not unreasonable, given that it has hitched its wagon to a public service. When capital enters the business of delivering a public service, in my view it sacrifices the true independence to operate that it would have if it delivered a private service to private individuals. That is the deal: business gets to ply its trade on the condition that government and usually a regulator, but not always, meddle with its business model. It is a condition to operate.

For this reason, I am very interested to hear how the Minister will respond to your Lordships’ questions. These have been very worthwhile amendments and I thank the tablers. I look forward to the Minister explaining, first, what a “public service” is, secondly, what a “utility” is and, thirdly, where they sit in the context of the Bill.

Tenant Fees Bill

Earl of Lytton Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 20th November 2018 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, I rise to speak to Amendment 29. I entirely understand the points made by the noble Baroness, Lady Grender. A number of individuals collectively forming “tenant” particularly occurs in London and other metropolitan areas. Those of us who inhabit the countryside tend to have single tenants in a building, rather than a system of sharing.

I have absolutely no problem with the idea of ensuring that landlords are not overcharging beyond reasonable cost. My concern is that this is beginning to look like micromanagement of the letting process. The question is, “reasonable” by whose standards? For instance, a group of tenants—perhaps four of them—decides to take on a property on a two-year term. Let us suppose they collectively decide that they want to finish the tenancy after one year and want to move out in the run-up to Christmas, which is known to be a difficult time for the letting market because things tend not to get going again until into the new year. By whose standards would “reasonableness” be measured? Would it be by reference to the tenants, who, after all, have agreed to take on the property on a two-year basis and wish to terminate after one year; or by reference to the reasonable costs the landlord would run up in that process? All sorts of things hang on that—for example, rent voids and running costs such as heating and security while the place is unoccupied, were that to happen.

I appreciate that things get more difficult when you have a number of tenants and one wants to go, because that creates a dynamic which, as the noble Baroness rightly said—and has said previously—affects the other occupants. It would be really undesirable if landlords responded by simply deciding not to agree to early termination. That would be the worst of all possible worlds. As a private sector landlord, I have never used that other than when someone wants to terminate at short notice and before the property can reasonably be re-let. That tends not to happen in the high-pressure circumstances of inner-London shared residential, but with a freestanding property in the countryside, where things are quite different. The Bill will apply across the nation.

I counsel a little caution here, and perhaps the Minister would care to comment. If the culture creeps in whereby no early termination of a lease is possible or will be agreed, we will be back here later with another measure to say that landlords must provide that facility. I do not see this as necessarily being the endpoint, and I should like to tease out that issue to give some closure on what we are doing with residential landlord and tenant. Hopefully, the situation can stabilise so that everyone will know where they are for, at any rate, the reasonably foreseeable future.

[Lord Best (CB)]

My Lords, it is worth underlining that this part of the Bill is an important measure to prevent what is a pretty common abuse, which is, when there is a change of tenancy, at little or no cost to the landlord, the agents involved making serious amounts of money, which the Bill would prevent them doing in future.

At Second Reading, I cited an illustration from my last intern, whose sister was taking her place in a flat share of three. Each of them, on entering the flat, needed to pay the agent a fee of £275 for the privilege of signing up. When one of the occupiers left and was replaced by her sister, the outgoing one was charged £250 for termination of the tenancy agreement and her sister, who was moving in on the same day with her packed suitcase, was charged £275 as a new tenant. The agents got £525 for this transfer from one sister to another. The landlord received exactly the same amount of rent, because there was no discontinuity in the rent paid.

In such circumstances, paying £50 as a takeover fee for the privilege of signing a photocopied document when one person moves in in place of another sounds quite enough. The guidance may be the best place to put this, but the test must be whether the landlord has suffered a loss of rent. If there is no such loss, surely the £50 should kick in as the maximum which the agents can take. One can understand the need to compensate if there has been a loss of rent because of a gap when one tenant has moved out and no new one has arrived. Otherwise, £50 sounds like a maximum not a floor.

--- Later in debate ---

[Lord Shipley (LD)]

My Lords, I support the noble Lord, Lord Kennedy, in these two amendments, which would help to tighten up the Bill. As he said, paragraph 8 of Schedule 1 is very open-ended, and he referred to a loophole potentially lying within it as it is worded. I think his amendment will tighten it and will do so partly because it is in the interests of the tenant, who may secure a cash saving in the amount they pay for a utility even though they may have to pay a fee to achieve it. I therefore hope the Minister might be willing to look at that carefully. As paragraph 8 of Schedule 1 is currently drafted, it simply refers to the fact that the tenancy agreement may require the payment to be made, but it does not define why it would have to be made. That is why the amendment in the name of the noble Lord, Lord Kennedy, is so helpful.

[The Earl of Lytton]

My Lords, I have great sympathy with this amendment but I would have more were it possible to ensure that utility providers themselves acted reasonably. While I will not name any names, one particular well-known supplier of electricity, with what is generally regarded as an extremely cheap and competitive tariff, has gained for itself an extremely poor reputation because of what happens when one wants to change to another supplier. Indeed, so tortuous are its processes—of which I have had direct experience—that many landlords specify in their agreements that the tenant may not change to that supplier, and with good reason.

I had a situation myself concerning the commercial supply of electricity to an agricultural building. My wife and I were faced with a demand from this company for over £30,000 for a period of some 15 months, when the only thing that happens in this shed is that for a period of about three weeks a series of low-wattage lights are used to assist with lambing, and for a period of about 10 days in another part of the year they are used for a sheep-shearing operation. By no stretch of the imagination could the fee have totalled that amount. When, finally, the company rang up my wife and said, “We’re going to take you to court”, her answer was, “Make my day”. It was not until the matter was referred to its lawyers that it became apparent that there had been a complete muck-up. It had simply not got an initial reading and was trying to steamroller that payment through in the hope that we would crack and pay it. I know that other landlords in the private rented sector are sometimes faced with the same situation.

These people run up the most appalling costs. While I have great sympathy that this should not be laid solely at the door of tenants, it is none the less an occupational hazard that afflicts both parties to this arrangement. That is the only reason why I have a reservation about the amendment in the name of the noble Lord, Lord Kennedy—because there is another dimension to this, where certain suppliers are acting utterly unreasonably and unconscionably.

[Lord Young of Cookham]

My Lords, the Countess of Lytton is clearly even more formidable than the noble Earl.

I too have a lot of sympathy with these amendments, but I believe there are already sufficient existing protections—not in this Bill but in other legislation—which address the concerns raised by noble Lords. Landlords who resell energy to their tenants for domestic use are governed by maximum resale price provisions set by Ofgem under Section 44 of the Electricity Act 1989 and Section 37 of the Gas Act 1986. This prevents landlords from overcharging tenants; they cannot charge the tenant more than the landlord has paid. If the landlord does overcharge, the tenant is entitled to have the charge lowered and overpayments refunded. The tenant can also bring a claim against their landlord to the small claims court for the amount that has been overcharged plus interest. In addition, on other utilities, landlords are prohibited from overcharging tenants for the resale of water under the maximum resale price provisions set out in the Water Resale Order 2006. If the landlord does overcharge, the tenant can take legal action through the small claims court to recover any overpayment and the tenant is eligible to recover interest at a rate of twice the average base interest rate of the Bank of England for the period they have been overcharged.

Amendment 31 would specifically require landlords to review any contract held for the provision of utilities and to consider switching provider if this would be beneficial to the tenant. In the majority of cases, tenants will be responsible for paying their own energy bills; they will pay them direct to the supplier and not to the landlord. So in most cases, tenants will already have the right to choose their own supplier. The tenancy agreement will set out who is responsible for paying these charges. Where the landlord is responsible for paying the bills, they may seek to recover these costs through the rent or directly from the tenant but, as I have already explained, they are already prevented from overcharging for this for energy and water.

Through, for example, the How to Rent guide, we encourage tenants to speak to their landlord or agent if they think their utilities payments are too high or if they want to request a change of supplier. In many cases, it may be in the interest of the landlord to move to a more competitive supplier as that may help to market their property in the future.

In addition, the Government’s Domestic Gas and Electricity (Tariff Cap) Bill received Royal Assent on 19 July. This requires Ofgem to implement a price cap on standard variable and default tariffs, which will guarantee protection for the 11 million households currently on the highest energy tariffs.

Against that background, I hope the noble Lord will feel able to withdraw his amendments.

--- Later in debate ---

[Baroness Gardner of Parkes (Con)]

My Lords, I have moved this amendment simply because it is essential for people to know what they can be charged and what they cannot. The noble Lord, Lord Kennedy, commented at the end of his speech on just that fact: that people need to know. If something was in the guidance that would indeed be very valuable, but at the present time people have no idea what they will be charged.

A lot of people have no idea that they have to prove they have a right to be in this country. I am sure most of us remember the embarrassing start of this whole problem, when a very impressive member of the Government at the time found that she had not checked on someone she employed. That is where all this started. As I understand the situation, there is now a fixed amount that people would be asked to pay for such an official designation of their nationality and the rights they have here. People are often totally unaware of this.

I understand that overcharging should not take place—I am not for a minute suggesting that—but people will need to know that, to rent a property, they have to prove that they are an ordinary person entitled to live here and not limited in what tenancy they can undertake. That is the purpose of this amendment. I claim no expertise in the wording of it, as the Public Bill Office very kindly helped me. I would be interested if people have comments on that. The principle behind it is to enable people to know what is and is not legitimate. Whether it is the agent, the prospective tenant or anyone else who provides that necessary information, it costs. You do not get it for nothing; that is the problem. I feel that the Bill is rather restrictive at the moment. I beg to move.

[The Earl of Lytton]

My Lords, the noble Baroness has made a valid point. I recall some years ago having to check the identity of an applicant for a business tenancy, who produced a passport from a Commonwealth country which was in date but did not contain the crucial words in the out-of-date one, also presented, which described the bearer as having the right to remain in the United Kingdom. I have always felt very nervous about trying to sift through this, because of the penalties that can be visited on one professionally—in this case, it would have been on a client landlord—in connection with letting. Getting these things right and carrying out identity and immigration status checks cannot be left to the tea boy. They need to be done by somebody who knows what they are doing and can take responsibility.

This takes us back to the question of where the two-way street between landlord and prospective tenant should lie and whether it is right that the landlord provides a property that he has warranted as clean and tidy, fit for purpose, not unsafe and so on, and the tenant is responsible for the cost of verifying their bona fides, as the noble Baroness says in her amendment. It seems that that is fairly unarguable, particularly in London where there are people of so many different nationalities. A further issue that needs to be addressed, assuming that eventually this country will leave the European Union, is European citizens’ right to remain here. The noble Baroness raises a valuable point, and I look forward to hearing what the Minister says.

Financial Guidance and Claims Bill [HL]

Earl of Lytton Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 13th September 2017 Lords Chamber

[Baroness Stowell of Beeston (Con)]

My Lords, I am sorry that I was not in the Chamber earlier to hear my noble friend Lord Hunt of Wirral make his contributions on earlier amendments on a similar theme. I should declare that I have recently become a member of the board of ABTA.

I know that the explosion of claims for holiday sickness has been mentioned already, and I am grateful to the noble Lord, Lord Sharkey, and my noble friend for highlighting the way in which cold calling is encouraging people to commit fraud. However, we need to recognise that in encouraging this kind of fraudulent behaviour—which, in itself, is very bad for all the obvious reasons—false holiday sickness claims are also affecting our reputation abroad. We might like to make fun sometimes about the Germans and their towels, but we Brits are now gaining a reputation not only for having dicky tummies and not being able to weather the food overseas but, much worse than that, as a nation of people who are now willing to commit fraud.

This goes more broadly than the narrow way in which we are debating it today, and I want to lend my support in principle to the efforts to tackle a growing and serious problem.

[The Earl of Lytton (CB)]

My Lords, I would not normally deign to interpose in this debate but, having listened to a number of the arguments that have been put forward, I feel compelled to voice my support, but with a word of warning.

I was looking at my private emails and found that since half-past two this afternoon I have had four spurious emails from an outfit called Metro Bank, with which I have no business, telling me about the suspicious activity on my account and suggesting that I might like to click on a link. The fact that such messages usually contain spelling mistakes and start off “Dear Customer” without any other personal identifying information, and the fact of the sheer number of these repeated emails, probably tells its own story, but never mind. The reason I raise that is because in my experience—along with that of probably everybody in this House who has received on their mobile phone something to do with PPI or a personal accident—I frequently get messages that tell me my claim has been settled in the sum of £4,275.80, or something like that, and ask me to click on a link so they can process the claim. I have had no such incident and made no such claim; the process is led by a completely bogus and fraudulent promise of something for nothing.

In my experience, these things are increasingly moving from a posse of anonymous, but still identifiable, 0800 telephone numbers of one sort or another to people’s mobile numbers and landlines. In particular, the mobile numbers may well be a pay-as-you-go account: completely anonymous and possibly passed on in a pub, complete with its ticket. Nobody can track down where these things are coming from. So, if somebody makes a cold call from a pay-as-you-go mobile phone, and having made contact then pass that live contact back to a claims management company of perhaps no great repute and even less good intent, is that still a cold call? If not, then straightaway the whole process of what these amendments are designed to deal with is bypassed. I would like to make sure it is not.

[Lord Sharkey]

Could I try to provide a little clarity, perhaps even a partial answer? The amendment is worded so that cold calls, or the result of them, cannot be used for the benefit of claims management companies. It is not just about the cold call itself—information cannot be passed on in a way that benefits CMCs.

[The Earl of Lytton]

My Lords, I am grateful for that. The nub of what I am getting at is whether we have a problem with enforcing that. These people are clever and devious and will basically stop at nothing because it is a free bet—they seem to be able to weave their way in and out of our virtual world of technology to con people and mislead them. I would be absolutely in favour of anything that can reliably prevent that happening. That was the only point I really wished to make.

[Lord Elystan-Morgan (CB)]

My Lords, these debates endorse the fact that we dealing with a social nuisance of massive proportions. There are, I suppose, situations where a few cold calls might possibly be justified on some grounds, for example where a person has rights but is not conscious of how those rights can be carried out and brought to fruition. Those instances are in a small minority. The vast majority of cold calls are fraudulent and disgraceful. If there is an agreement between the two parties, then that amounts to an agreement to pervert the course of justice. I think I am right, as a proposition of law, to say that every agreement to pervert the course of justice is of itself a perversion of the course of justice. It is as serious as that.

A blanket overall prohibition, as the noble Earl, Lord Lytton, reminded us, is probably not appropriate. On the other hand, some very strict and practical steps have to be taken swiftly.

Building More Homes (Economic Affairs Committee Report)

Earl of Lytton Excerpts

Thursday 2nd March 2017 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, it is a great pleasure to be able to speak in this very important debate. I declare my interests, which in this instance include being a private rented sector landlord and a commercial landlord. Probably more appropriate in this instance, I also declare that I am a practising chartered surveyor with direct involvement in the development process and the employee of a practice dealing with both building cost consultancy and construction management. I am also a vice-president of the LGA and the National Association of Local Councils.

The committee’s report is very welcome for its range and depth of analysis and I congratulate the noble Lord, Lord Hollick, and his team on that. It is to the credit of the committee that a lot of its points appeared in the housing White Paper. The basic premise is sound: we need more homes and we are not delivering enough of them. But that masks a complex raft of issues, as we have already heard. I am not sure I subscribe absolutely to the idea of a broken housing market. I think the housing market is probably performing as we might expect, given all the tinkering around that has gone on over many years. But I am not an apologist for those shortcomings, which are fundamentally significant and affect potential home owners. As the noble Lord, Lord Forsyth, said, there is no silver bullet.

The Government have started to try to simplify things. There is no question that the consistently flagged-up point is the sheer complexity of the system in getting from a greenfield site to a completed development—the very high costs and risks involved in that and which confront those engaged with it. The Government have made a start and are trying to address a number of issues. However, in some areas, analysis and policy still appear less coherent. I will therefore deal with a few of the barriers as I see them working in the particular sector that I occupy.

Housing provision is a pipeline that needs constant feeding. The more you try to chop and change things as you go along, the worse things get. The planning system itself has become quite labyrinthine in its complexity. It has become a legalistic, adversarial exercise played for very high stakes. That applies to development sites of any size, large or small; we consistently hear that it takes no more effort to get a large site under way than a small one. That cannot be quite right.

To prove deliverability, it is necessary to jump through a whole series of hoops, regardless of whether there is any objective need. I have no problem with the need to demonstrate ecological compliance, but proving a negative in circumstances where there is no evidence—and there turns out to be no evidence—of the presence of, for instance, great crested newts or whatever it may be is a cost that is built in and then feeds into the eventual cost of housing. It causes substantial delays, and provides a barrier that militates against smaller applicants, who do not have the vast teams of experts that the larger boys have. There are liabilities in terms of legal tripwires of many sorts, and for one person to understand the ramifications is pretty difficult.

Huge inconsistencies are evident within and between local planning authorities. But as the noble Lord, Lord Layard, said, the system is not of their creation. It has been created by the rest of us—by society. I do not impugn the integrity of overworked planning officers, elected local government members or, for that matter, applicants in general, but I adhere to advice once given to me by my late father’s lawyer: where there is uncertainty, muddle and confusion, dishonesty comes close behind. That may range from the overexuberant application of a particular set of rules at one end of the scale and, at the other, some rather sharp practices. I have experience of all of those. Local planning authorities have to deal with some aggressive and bullying tactics in the course of their business.

The lack of adequate staffing at planning authority level is well known. Noble Lords should try finding an authority with any in-house heritage competence, for example, or for that matter willing to pay an outside provider for it. I and colleagues have experience of pre-application advice turning out to be a complete waste of time. It is almost as if the officers dealing with the thing are operating on separate agendas. But I do not think that is a criticism so much as a demonstration of inexperience, diffidence and self-protection. However, it results in inordinate delays, so I support the point made to the committee that much more resource needs to be put into local authority planning, and if fees are to increase they must be hypothecated to the planning administration budget and not be capable of being vired to some other account. I do not treat as entirely apocryphal the account that reached me of a developer being asked by an authority if he would fund the employment of an additional planning officer needed to deal with his own application.

The practice in which I work regularly comes up against significantly drawn-out timeframes, particularly on reserved matters approvals. I know that the Government also have that in focus. Once a resolution to grant is made, it can be many months, stretching into years, before you can get the remaining issues resolved. Some requirements are patently absurd, such as one that a colleague recounted to me where an ecological receptor site was required to accommodate an unlimited—it was specified as unlimited—number of reptiles and to be maintained in perpetuity. Maybe the officer was being overprotective, but, whatever the reasons for that sort of thing, it creates needless delays and adds to costs.

On democracy, local authorities are of course political animals and they seek to reflect the desires of an electorate who often do not want to take on board the wider needs of the nation’s requirements in housebuilding—still less those of an adjacent constrained authority, possibly one of a different political colour. I have seen attempts to dump—to use an unparliamentary word—development on the periphery of an authority area or an area where voters’ politics differed sharply from those of the controlling party on the council, and so on and so forth. There are potential mismatches between the neighbourhood aspirations and the perceptions of the potential ability to assimilate new development as compared with the obligations placed on principal authorities by a Government and the Homes and Communities Agency requiring them to do better.

Politics mixed with planning creates friction and drag in the system, seemingly in direct proportion to the respective parties’ belief in their powers of veto. A word of warning here: to pick up the point made by the noble Baroness, Lady Young, about the quality of what we produce, if we enforce fast-track development, the risk is that we do not get the highest quality that we ought to have. We need to be careful about that.

The bigger issue is that if we want democracy and set out to expand that to communities, which I support, speed and efficiency may well suffer, particularly if participants do not understand the basic policy or principles behind it or do not wish to engage themselves in the financing of neighbourhood plans, for example. Resources need to go into that. The question is often asked, “What does this development do for the people of our municipality or community?”. In reality, the question should be the one once suggested to me by a Liberal Democrat aspiring parliamentary candidate which is, “Where is it most convenient and appropriate for people to live, work, have their recreation and travel about sustainably?”. Development needs to be looked at in a reworked 21st-century version of how medieval settlements came into being. They were strategic. They had communications and they were defensible positions. There was access to food and materials and all the other things that were needed. We need a reworking of that because that is part of the desire line that will make these communities not just some other shell that takes 40 or 50 years to bed-in socially, but somewhere that is cherished and invested in for the longer term.

I could raise many more issues, but I will foreshorten my comments to just touch on a few myths that seem to be doing the rounds. The Government seem to be blowing hot and cold on the balance between the private rented sector and the home-owner market. They cite that investors and home owners are in direct market competition. But they have not provided any credible evidence that I have seen to back that up. I noticed that the bar chart in figure 5 of the committee report, which is borrowed from another source, on the percentage of household income spent on rent as opposed to mortgage repayments, does not seem to be a comparison of like for like. I am sure that it was not lost on noble Lords that matters of insurance, repairs and maintenance, which are not typically reflected in a mortgage repayment, would skew the results of that, never mind the parallel issue of proving creditworthiness and raising the necessary deposit to obtain a mortgage in the first place. Some of the disadvantages meted out in recent Budgets to the private rented sector that seem hypothecated on that sort of premise are not well targeted and will cause damage. Although the sector could justifiably be expected to perform better—I do not doubt that there could be better landlords about—it is none the less an important sector which needs to be nurtured and cherished, along with all the other things that the Government are doing.

One statistic coming from government was that those now approaching retirement were home owners by the age of 30 in a much greater proportion than pertains at present. I suggest that mortgage finance, lifestyle choices and other relevant matters were quite different in the late 1980s. Certainly, the example of my children has been that, as young adults, they live highly mobile lifestyles, often flitting between jobs or even between different localities within a country or between countries. The last thing they appear to want is to be geographically fixed and lumbered with a mortgage or indebted to parents for an otherwise unaffordable deposit. To this should be added some very substantial transaction costs that have now been built into the system and particularly affect the London market.

I live in a part of Sussex where there is a lot of demand for short-term lettings— people between houses, on short-term placements and so on—but we have also in the past, and do so currently, let to families with children who have been with us for a decade. The children come along as four and five year-olds and leave as teenagers. If that is not sufficiently long-term, I do not know what is, but it is wrong to try to constrain the market. One problem is that if people feel that they cannot let short-term, they will not do it at all, or they will set up a holiday let or something like that. There has to be removal of some of the impedimenta that mean that people feel threatened and that they do not have a ready exit from a longer-term situation.

There are many issues involved in this area of activity. I commend the committee on an excellent piece of work. I do not agree with absolutely everything that is in there, but it is a very workmanlike approach and I hope the Government are listening.

Deregulation Bill

Earl of Lytton Excerpts

Wednesday 11th February 2015 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, I support this group of amendments and declare an interest as a professional involved with property, and in particular as having some involvement with commercial and residential management—although not, by and large, in Greater London, I hasten to say.

This matter seems to have started from what might be described as a once-in-a-lifetime event, the Olympics, and the implications of a London-specific piece of legislation; namely, Section 25 of the Greater London Council (General Powers) Act 1974. I follow the point made by the noble Baroness, Lady Hanham, that London appears to be a special case. Why else would that piece of legislation be on the statute book in the first instance?

We are dealing with the potential impacts on the amenity of existing residents. The question of short-term lettings introduces the concept of “churn”—the turnover of occupants, the cleaners, the services, the deliveries, and the implications for security and people coming and going, possibly at odd times of the day and night. With that, there is the natural local authority concern and the issue of public interest in matters of safety and security, including overcrowding, the maintenance of standards, fire precautions and so on. Beyond that, there is the ability to police whatever is put in place to ensure compliance. I have a particular problem with that because, for every block of flats to which such circumstances might apply, if they happen to be in a particularly accessible area near somewhere in our metropolis where there are constant events, one can easily see that a certain proportion could be on this “churn” at any given time. There might be a real question regarding compromising the peace and tranquillity of those who wish to live, work and do all the normal things that normal residents do.

I support the argument that there needs to be knowledge and a degree of control in the hands of the local authority through its planning, building regulations and environmental control functions. London is a special case; there is always something going on there, and that is why it is particularly important to have special regard for it. A less than 50% response—a minority of London boroughs responded—is not exactly an endorsement of what is being proposed by the Government. The noble Baroness, Lady Hanham, who has enormous experience from her involvement with an inner London borough, and the noble Lord, Lord Tope, who has great experience from a little further out, know that these are the issues, and their voices should be listened to. The noble Lord, Lord Tope, had a quick dig at the Minister about what the term “shortly” might mean. I was brought up in the west country, where there were two terms: one was “shortly”, and the other was “directly”. It was important to know that “directly” meant that there would be a quicker response than “shortly”. I hope that no one with west country roots will come back and tell me that I am wrong, but that is what I understood by those terms.

I apologise for continually referring to the noble Baroness, Lady Hanham, but she made a number of good points. I also pay tribute to the noble Baroness, Lady Gardner, for introducing the amendment in the first place and for being assiduous and persistent in plugging the general point. The noble Baroness, Lady Hanham, referred to the fact there is an increasing amount of investment property in London. That means that it is not necessarily governed any more by the wishes of those who live, work, shop and raise children in our metropolis. If we are not careful we will get to a tipping point, where the social profile and how to enforce and govern it get altered to the point of being something other than for those who live and work there. After all, they are the people with the democratic vote.

If we are not careful, this will go right to the heart of the structure of society. Of course, that erosion will be that much more rapid in areas with what we might call continual ongoing attractions, which might attract these short-term lettings—they will be cut most severely. To look at London as a composite whole is wrong. The noble Lord, Lord Tope, identified this as a phenomenon occurring elsewhere. For all I know it might affect areas near Glastonbury, the Hay-on-Wye Festival or any other place where these events go on in the countryside.

We are dealing with a class of lessor—people who allow their homes to be used as short-term lettings by others—who, it must be said, by and large lack the knowledge and expertise of renting in this sector. I do not think that many of them have the slightest idea of what is involved in the wear and tear on the property, what the critical capacity is of the hot water system for their block, or in any of the other matters that might be involved, such as the security at the front door when a large number of people, checked and unchecked, have access to the code to come and go.

I do not see what the Government are proposing as a deregulatory measure as at all deregulatory. It opens up a raft of potential further regulation. If it goes through without further ado I predict that we will be back again in not very many months, trying to patch over the cracks and deficiencies where things have started to go seriously wrong. They will go seriously wrong in the most critical areas of our capital, not in the relatively decentralised areas. There is a real question of how communities, local government or residence associations—or, for that matter, landlords or their agents—will be in a position to control this.

We need regulation, especially as some of the main players operating internationally on the web do so in an almost entirely unregulated environment, as far as I can see. That is putting aside the stories one hears of, which cause immense difficulties: about unpaid local taxation, problems of double booking and things like that, of people apparently thinking that they have a holiday let yet the owner knows nothing about it. All those have come to my attention. I do not know whether they are all completely apocryphal; I think they are probably not. We need some regulation, which really ought to be before this House.

I hope that the Minister will think again. I hope he will realise that, although one would have every wish to ensure that there were means whereby people could capitalise on, for example, Wimbledon fortnight by letting their homes to the wealthy from elsewhere, it would need to be done without it having a negative effect on other individuals, on those whom one might call normal residents and on the whole process of due diligence and the regulatory environment. In general, I am entirely in sympathy with Amendment 47 and the amendments in the group that follows it.

[Baroness Gardner of Parkes]

I am now rising to speak very briefly to the group—

Deregulation Bill

Earl of Lytton Excerpts

Monday 7th July 2014 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, I am afraid I have a fistful of declarations of interest to make, not only as a vice-president of the LGA, but as a landowner, a member of the CLA, a landlord, a practising chartered surveyor, chairman of the Rights of Way Review Committee and, of course, due to my involvement with parish and town councils. I am afraid I do not speak for any of those other interests.

Much of the Bill is welcome. Anything that calls itself deregulation is a start—in particular, I briefly point to the issues of dealing with short-term lets and the health and safety of self-employed trades—always provided it produces net reductions in burdens and does not just shift them around or create other problems in their wake. I am sure other noble Lords will relate to that.

I wish to follow the example of the noble Lord, Lord Dubs, and refer to Clauses 21 to 27 on the matter of rights of way. I agree that they represent the essence of what the stakeholders working group agreed to. I particularly pay tribute to the way the disparate interests involved with that sought to find common ground. I think that should be applauded. However, it had quite a narrow remit, and many issues of current management and usage of the rights of way system remain unaddressed. I hope that the Minister will confirm that these remain in focus and that the Bill, when it has been ticked off, does not just become a means for ignoring the ongoing need to do something.

I think we all agree that the rights of way system in this country is a thing of glory and great value culturally, economically and socially. It more than merits better treatment, with an even-handed and objective approach as befits a national treasure. At present, it is deprived of resources, a primary cause of the delays in recording historic rights and of procuring necessary change along the way. This risks leaving many stakeholders inherently dissatisfied, if not irate, and the current day-to-day management and administration suffers.

Therefore, I hope that we will not settle the issue of unrecorded rights of way after 2026 only to open up, as we approach that date, some other area of contention that we have not thought of. The Bill deals with some aspects but not with others. I hope that the Minister can reassure me about the intentions for the rest, as I have said. I accept that the rights of way network is very large and often incoherent. Its statutory basis is complex and the coalition inherits a legacy of many past Administrations doing too little or nothing, with occasionally some expensive and ill-targeted legislation on the way.

I am a landowner within the Exmoor National Park. I know how useful it is to both users and landowners to have a focused, resourced and authoritative body such as a national park authority to deal with issues of network coherence and management. Such bodies have proved effective in defusing negativity and removing obstructive stances by just process, expertise and reasoned dialogue. We need more of that.

Therefore, the key to all this is resources for rights of way, which outside of national parks, as I have suggested, have been decimated. If that deepened voluntary dialogue between stakeholders, I would welcome that as a slightly back-handed compliment. The administrative machinery that underpins any necessary change is essential, and access to the countryside on urban fringes is no less important than access across rural broads or remote uplands or along the coast.

Despite the limited claims of the Bill, which I support, I hope that the Minister will confirm that the Government are apprised of the hugely beneficial opportunities offered by investment in a national rights of way system, not least its eventual rationalisation, making it fit for the 21st century and less of a bone of contention.

Standards in Public Life

Earl of Lytton Excerpts

Tuesday 4th February 2014 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, I too congratulate the noble Lord, Lord Bew, on securing this very timely debate. The attempt to yoke standards in public life with public engagement is commendable but it is no easy task. The noble Lord, Lord Norton of Louth, covered a point which I was going to make and I would like to reinforce it. There is a lack of knowledge about the systems on which interviewees are being asked to comment. It is not just about the political scene, it is about all manner of things. Things such as crime statistics, in which I am interested, or medical incompetence may be important to a few but are not often a wider consumer experience. This report shows there is no room to be complacent but it also show there is an endless need to try to dig a little deeper.

Since 2012, we have had several high-profile instances of things going wrong in both the public and semi-public sectors. The fact that the semi-public bit is not truly a public body does not mean that it does not have a public profile or impact on the public interest. Professor Barry Loveday of the University of Portsmouth wrote an excellent paper some years ago about performance management. He identified the target culture; at senior level, it is a culture for its own sake. Then there is collectivisation of risk and responsibility, so that there is no individual to blame and, with it, no real focused leadership. There is protection of the status quo—the system for its own sake. With the rank and file, not to be too segregationist here, there is a silo mentality. People say, “It’s not my job, not my responsibility”. There is a demarcation with other people’s roles and a philosophy of “Don’t grass on your mates”.

Within all this, some commonalities arise. There is the lack of ethical framework, referred to by the noble and right reverend Lord, Lord Harries. The rights and entitlements are not matched with the duties and responsibilities, a point made yesterday in “Thought for the Day” by Clifford Longley. There are no real consequences—everyone is doing it, so do not break ranks or make yourself conspicuous. These are the matters of concern.

We have heard about leadership and politicians. I am afraid to say that both rank exceedingly low on the OECD statistics, but there are obviously sociological aspects and there is this awful thing to do with victimless crimes—as if ever such a term could be invented. We should not have that; because the Home Office counting rules do not count them does not mean that there are no victims. So there has been a failure to exert rigorous investigations. I have in the past suggested that there should be senior criminal judge investigations in certain areas of our public life; there are victims who need to be recognised as there are malefactors to be brought to book.

I could go on, but my time is up. I wish the committee chaired by the noble Lord, Lord Bew, very well. Never was a role more worthy or necessary of further funding.

Local Audit and Accountability Bill [HL]

Earl of Lytton Excerpts

Wednesday 24th July 2013 Lords Chamber

[Lord Campbell-Savours]

My Lords, I will briefly intervene to follow up some of the comments of the noble Lord, Lord Tope. From 1986 onwards, I argued in the Commons for revision of the law governing the provision of information to the public. It was during a very interesting period following the arguments in the mid-1980s over Tony Wright and the reform of the Official Secrets Act.

One of the reasons we argued for freedom of information was that we believed that it would change the conduct within local authorities. My noble friend’s amendment would extend those rights of access to a group of organisations that effectively are carrying out the functions of local authorities. In saying, “change the conduct”, I refer back to the comments of the noble Lord, Lord Tope, on the additional cost. However, no-one has been able to quantify the benefits financially to local authorities of being more transparent in their operations. I frequently used freedom of information requests to press local authorities and other public bodies on the way that they conduct themselves. After a series of freedom of information requests, one sometimes notices a change in the way that a local authority conducts its affairs. Very often, it means greater efficiency, the saving of public money and a happier general public paying their council taxes.

When the Minister winds up, I do not think that he should see the issue simply in terms of costs; he should think about the actual benefit to the taxpayer of a system that is far more transparent in its operations.

[The Earl of Lytton]

My Lords, I had intended to add my name to the amendments tabled by the noble Lord, Lord Wills. I regret that probably I advised the clerks too late for that to happen. I start, therefore, by apologising to the noble Lord.

As did the noble Lord, Lord Tope, I declare my interests as a newly polished and appointed vice-president of the Local Government Association and a possibly somewhat more tarnished president of the National Association of Local Councils. The issue is one of not adding unnecessarily to costs, as the noble Lord pointed out. Part of me says that whenever locally—or at whatever level—a greater throughput of taxpayers or public money is being used, it is right that the level of scrutiny is proportionate. The reference to “significant private companies” is perhaps slightly less than I would have liked. I would have liked the figure itself to have been objectively significant rather than the company providing the service being significant. I am not sure that I know what a significant company is in this context, whereas I am clear as to what a significant figure might be.

However, it is right that auditors should have a degree of discretion in looking at this. As I said at an earlier stage in the Bill, we may be looking at quite small organisations that, for whatever reason—perhaps because of some project they are undertaking—may be responsible for deploying fairly significant sums. It is right that those should be subject to scrutiny. There is no place here for opacity in the way in which figures are presented. Therefore I very much support the principle of this amendment.

I will digress, if I may, onto the freedom of information issue. I am aware that one of the get-outs in relation to providing freedom of information data is when the request is considered to be vexatious. The standard of “vexatious” as a term of art seems to be a matter of self-assessment to a degree by the body that is providing that information; at least, that is how it seems to me. The noble Baroness opposite is shaking her head slightly; if I have got it wrong, I apologise. However, it seems to me that that is capable of a degree of latitude. I certainly have seen evidence of “vexatious” used as a reason for not providing information—although not in the context of local government—and the term ought to be made a little clearer. In general terms, I support what the noble Lord, Lord Wills, has put forward and am grateful to him for continuing to bring it to the attention of the House.

[Lord Palmer of Childs Hill]

My Lords, first, I declare an interest as the current chairman of a local authority audit committee. I shall chair a meeting later this evening. I shall add a touch of reality to the comments made by other noble Lords.

The first subsection of the amendment moved by the noble Lord, Lord Wills, states that the local auditor is to have right of access to the books and records of contractors. In the real world, any local authority worth its salt has in all its contracts a clause allowing it access to the documents of its auditors or the processes that those local auditors use. If a local authority does not have that, shame on it. What we are perhaps trying to do here is to put into legislation something that is a normal commercial attitude that local authorities or corporate bodies should do anyway. As my noble friend Lord Tope said, commissioning is coming on in so many local authorities, and the measure and size of some of the contracts will be very significant. With these large commissioning items, it is not the legislation that should be relied on but the normal contractual terms between the local authority and the contractor. The Government and the noble Lord, Lord Wills, are right to highlight that local authorities should deal with this with their contractors. As my noble friend Lord Tope said, when the Government review these matters, even after this Bill is passed, they should perhaps seek to encourage that within local authorities.

Subsection (3) of the amendment states:

“A local auditor must make available on request any audit documents, obtained under … the Freedom of Information Act 2000”.

That worries me somewhat because, if something is too rigid and too demanding, the net result in practical terms is that people do not put it down on paper in order not to be subject to freedom of information. That might discourage the local auditor from carrying out its job in a deep way. I am all for transparency, but it should be transparency as the auditor feels is right rather than being enshrined in law. Although I understand where the noble Lord, Lord Wills, is coming from, and I appreciate the amendment, I hope that it will encourage the Government to review matters before the Bill becomes law.

Local Audit and Accountability Bill [HL]

Earl of Lytton Excerpts

Wednesday 17th July 2013 Lords Chamber

Moved by

[The Earl of Lytton]

47: After Clause 39, insert the following new Clause—
“Parish polls
(1) The Secretary of State may by order amend Schedule 12 to the Local Government Act 1972 to make revised provision for parish polls with implications for parish finance.
(2) An order under this section may make provision for—
(a) the number of persons on whose vote may give rise to a parish poll;(b) the purposes for which a parish poll is sought;(c) its application to smaller authorities or authorities with electorates below a threshold to be specified in the order;(d) safeguarding an authority against frivolous or vexatious use of the right to call for a parish poll and disproportionate costs of a parish poll, including circumstances in which an authority conducting the poll may require reimbursement of the cost of a poll from a parish; and(e) the circumstances in which a demand for a poll gives rise to a mandatory or discretionary requirement to conduct a poll including the discretion of the chairman of a meeting at which there is a demand for a parish poll.”

[The Earl of Lytton]

My Lords, this amendment is a further attempt to remedy an issue concerning parish polls. I declare my interest as president of the National Association of Local Councils, which has a particular interest in this. The background to this is already recorded in the Official Report of 26 June. On that occasion I was very gratified to receive not only the general support of the Committee but recognition from the noble Lord, Lord Wallace of Saltaire, that there is a problem that needs addressing.

Since then, accompanied by the chief executive of NALC, I have had an extremely useful meeting with the noble Baroness, Lady Hanham, and her departmental officials, and I am extremely grateful to her for that opportunity. I was encouraged by her very positive stance on this, as well as the great care with which her officials had obviously looked into the whole matter.

To summarise, parish polls are a very important way in which matters of interest can be aired and views sought, but they are governed by some fairly archaic legislation, which is more than 40 years old and contained in Schedule 12 to the Local Government Act 1972, and they are open to abuse. The issues are fourfold. First, incredibly minimal requirements are necessary to trigger a parish poll, which I have referred to in the past. Secondly, although it has to be on a parish matter, “parish matter” as a term of art is nowhere defined. Thirdly, once triggered, the costs incurred by the principal authority in conducting the poll are recoverable from the parish. While these may not be great in the overall score of things, in proportionate terms for a parish budget, they are pretty significant. Fourthly, there is no obligation to act on the poll, regardless of its outcome. Indeed, a number of polls have had very poor turnouts and inconclusive or even contradictory outcomes, as was outlined in the report by Action with Communities in Rural England.

This problem can only get worse. In Grand Committee, it was made clear that the Bill might not be the place for such an amendment. I understand that and the reasons for it. Yet it does affect parish finance and has a clear bearing on the way in which a parish is held to account. Equally clearly, there is a dimension of audit, although usually long after the event, as a check that the expense has been properly incurred.

The effect of the amendment would simply be to give the Secretary of State the power to amend by order the provisions of the 1972 Act. It does not of itself change anything in the Bill. The main change in this amendment compared with the previous version is in the five words at the end of proposed new subsection (1),

“with implications for parish finance”.

That was my way of trying to get round the issues to do with the scope of the Bill in terms of financial accountability and audit, which I explained in more detail in Grand Committee.

I am not hopeful that the amendment will prove acceptable. My purpose is to get on the record a firmer commitment to do something about this. The questions really are, if not here and now in the Bill, by this amendment, can something not be done at Third Reading, perhaps with—dare I say it?—a tweak to the Long Title of the Bill; I say that in the knowledge that we will shortly be dealing with a tweak to the Long Title. The best solution would be to accept something along the lines of this amendment in the context of the Bill, because it will be the quickest way of actually achieving something rather than expending powder and shot on trying to find some other parliamentary workaround to deal with what is, after all, not really the biggest of nuts to crack and which should not require a huge hammer to deal with.

Public money is at stake. If my amendment is not acceptable, and there is no tinkering with words that will make it so, perhaps the Minister could undertake to use reasonable endeavours to see if the Commons, with its wider powers over the scope of Bills, could be persuaded to do something. I believe, and have to accept, that the regulatory reform procedure is of no help here. The fall-back position, as I understand it from Grand Committee, would be for a Private Member’s Bill to be brought forward in a future Session, but at the cost of a further delay. If that is the only way forward, although it seems an awfully long-winded way of achieving something that really should be fairly uncontroversial, so be it. I would be happy to offer any assistance or activity on my part that could bring that forward. Perhaps the Minister could give an indication of whether, in that fall-back event, such a single-issue Bill would, in principle, receive government support and, more crucially, time to see it through. I beg to move.

[Lord McKenzie of Luton]

My Lords, we are sympathetic to the position adopted by the noble Earl, Lord Lytton, As my noble friend Lord Beecham said in Committee, the noble Earl has explained the archaic regime that exists at the moment for parish polls, the small numbers involved in calling a poll, the fact that the poll is not binding and the financial cost being recoverable for the parish. I would have thought an effort to address that would be well worth while. Indeed, the noble Earl’s amendment suggests that there should be an order-making power inserted into the Bill. Obviously, once the amendment itself has been accepted, it is presumably within the scope of the Bill; otherwise it would not be on the Marshalled List.

I do not see why it cannot be done. Maybe the wording needs to be changed. If the Government are reluctant to pick this issue up because they think that there are broader issues involved and it needs to be dealt with in some different way, perhaps we could hear that. However, if there is sympathy for the noble Earl’s proposition, and we are just looking for a parliamentary process to facilitate that, why not an order-making power?

[Baroness Hanham]

My Lords, we, too, are sympathetic to this amendment, and I am grateful to the noble Earl for having brought it to the attention of the House. We all recognise that parish polls are a way for local people to achieve something they want that is relevant and appropriate to the area over which they have authority. The noble Earl made it clear in Committee that sometimes that area extends to the European Union, which seems rather beyond the competence. We accept that there are concerns about the threshold for polls being called. I am very grateful to the noble Earl for coming to spend a bit of time with us, and we have had an opportunity to talk about it.

The way in which the noble Earl has constructed this amendment just about puts it within the scope of this Bill, but it is not wide enough for all that needs to be done. We believe that the scope can be made wider in the other place. We need to look at that carefully and will come back to it. I hope very much that we will be able to say that we will take that up and see it dealt with in the other place. If we cannot, then we are in the sort of territory that the noble Earl has talked about—a Private Member’s Bill or a hand-out Bill. I assure him that the Government are supportive of what he has said, and I give an undertaking to the House to take this away and look at how we can get it implemented in the best and quickest way. I hope that the noble Earl will be willing to withdraw his amendment.

[The Earl of Lytton]

My Lords, in the light of that undertaking by the noble Baroness, it would be entirely churlish of me, especially at this time of night, to seek to do anything other than to withdraw this amendment. I do so with my enormous thanks to her and her officials for the input that they have had on this. I have my fingers crossed for a later stage. In the mean time, I beg leave to withdraw this amendment.

Amendment 47 withdrawn.

Local Audit and Accountability Bill [HL]

Earl of Lytton Excerpts

Monday 15th July 2013 Lords Chamber

[Lord Palmer of Childs Hill]

My Lords, this is a very interesting amendment. I just wanted to add one other perspective. Any local authority worth its salt, particularly in this time of outsourcing, when so much is being outsourced to outside companies and bodies, will insist—as I have always insisted in my own local authority—that it has a right within the contract with the outside contractor to be able to audit the documents of the outside contractor. The place to do all the things that my noble friend has suggested is very often within the contract between the local authority and the contractor.

How that works in practice is that the local authority and its internal auditors need to see what the audit processes are within that outside contractor. The idea that the auditor of the local authority will go in on a normal basis and delve into the detailed books and records of the outside contractor is probably stretching the imagination a bit. The trouble with audits—this is where the noble Lord, Lord Wills, really hits the nail on the head—is that they are, in general, historical and you are looking at what went wrong. The noble Lord, Lord Wills, gave two good examples of what went wrong. The question to the noble Lord, Lord Wills, is: if the Government or the local authority had the ability to go in and audit the sort of companies and organisations the noble Lord described, would they have found these particular problems at that stage?

The noble Lord, Lord Wills, is on to a very important point. But I believe—as I hope that my noble friend the Minister will tell your Lordships’ House—that those protections of being able to audit should be more properly contained within the contract between the local authority and the outside body to which it is contracting.

[The Earl of Lytton]

My Lords, I have some knowledge of procurement issues. I, too, declare my interest as a vice-president of the LGA, but my knowledge comes mainly from the All-Party Group for Excellence in the Built Environment, which last year looked at the question of public sector procurement.

One of the things that we identified was the difficulty that many local authority and public sector bodies have in getting these very complicated contractual arrangements right. If they were not got right, you had some form of mission creep. You had this wall of contractual arrangements that could not be looked at until long after the event; for instance, the provision of a sports centre or a school over quite a number of months. Things had gone wrong in a number of cases because there was not the ability to oversee the thing properly or the knowledge of these very complex matters within the particular procuring body—not necessarily local government—to get a real grip on these things. The question was raised as to whether there should be an external procurement adviser to steer the body through. As I say, it might have been a local authority or it might have been a charity or something like that.

The noble Lords, Lord Wills and Lord Palmer, have hit on a very important point here: at which point can you see through into the detail and at which point do you get to “thus far and no further” in terms of the audit not running into some sort of mission creep? It is plain to me that there must be safeguards. Some very significant sums of money are involved. The earlier that problems are picked up and the process can look at structures and get feedback, the sooner they can be put right or something put in place to limit damage.

If not necessarily for the same reasons, I think that the noble Lord, Lord Wills, has raised an extremely important point, and I hope the Minister will feel able to respond positively to that.

--- Later in debate ---

This batch of amendments is an attempt to target the remedy, where remedy is needed, and not to cause the widespread concern that is currently held. I beg to move.

[The Earl of Lytton]

My Lords, I willingly gave my name to the amendments in this group. Like the noble Lord, Lord Tope, I did not feel that this was the right stage of the Bill to argue about whether Clause 38 should stand part, although I am aware of the LGA’s concern on that. It leaves hanging the question of justification, to which the noble Lord, Lord Tope, referred. The rule seems to be designed to deal with the very few, to the potential disadvantage of the many. That is a questionable approach. The purpose of Amendments 25 and 28 is to address this.

On Amendments 30 and 36, the period of 14 days is manifestly too short for the sort of notification and response that is required in this situation. I am advised that 28 days is regarded as appropriate and the norm. Will the Minister be kind enough to explain why the norm must be cut in half?

Amendments 33 and 35 concern the basis on which the Secretary of State will inform an authority—perhaps he might choose to do so by text message to the chief executive, or something like that—and the clarity of the procedures for that confirmation, which are worthy of being tightened up. I hope that there will be a favourable response to that suggestion as well.

On Amendment 37, it seems that the present code allows for latitude in what the authority shall “consider” or “have regard to”. It might be a value-for-money consideration or something like that. The question is whether, in transition from the current voluntary code to the proposed statutory code, the latitude will continue to be there. That is the nub of the question, and the bit that has not yet been answered satisfactorily. Having said that, I very much support the thrust of the amendments in this group.

[Lord Beecham]

My Lords, as I listened to the noble Lord, Lord Tope, moving his amendment—which, given an opportunity, we would support, faute de mieux—I was reminded of the remarkable film of the man who walked on a high wire between the Twin Towers in New York. It was an extraordinary experience. With this amendment, the noble Lord is navigating the gap between the Bill and the coalition agreement. I do not recommend that he emulates the high-wire artist, because he is very likely to fall precipitately to the ground, judging by what he has advanced tonight.

To begin with, the noble Lord assumes—he may be right—that the Government’s proposals are directed at unfair competition. That is the term used in the coalition agreement. It may be the case, but what constitutes unfair competition is far from clear. What the evidence is for unfair competition existing is even less clear. I will quote, as I did in Committee, from material supplied by the National Union of Journalists. One might have thought that it would be fairly sympathetic to the Government’s point of view, since journalists’ jobs are presumably more at risk if there is unfair competition in the newspaper industry than are the jobs of a handful of local government press officers. The NUJ pointed out:

“The last select committee charged with investigating the matter, observed that there was no evidence of a link between high-frequency local authority publications and the decline of ad revenue, circulation etc of the local press in the local authority catchment area”.

It also pointed out that the Audit Commission—perhaps this is one of the reasons that it is being abolished—in 2010,

“effectively debunked the assertion of newspaper proprietors that local authority publications represented unfair competition and were commercially damaging to other local newspapers”.

The Audit Commission found that the money spent by councils was not unreasonable, that few council publications were published sufficiently frequently to be a viable media for most local advertising, and—a matter to which no doubt we will return—that the current accountability framework would ensure that any misuse of public money could be dealt with.

Those are fairly strong views by an interested party that, one might have assumed, would be sympathetic to the Government’s position but is not. Its evidence is substantial in that respect. It also points out that the press began reducing its workforce many years ago, and that already something like 61% of local newspapers in the area it contacted had closed or struggled. One reason was the decline in advertising revenue, but it was not to be attributed to local authorities including advertising in their publications, because, as the Audit Commission pointed out, in almost all cases the publications were too infrequent to have that impact. Some 55% of newspapers cited competition from the new media.

It does not stop there. There are free newspapers in circulation. The Evening Standard is a free newspaper. I am not sure about the new paper launched by the Independent. It may be free, or cost a nominal amount. Some of the newspaper groups themselves publish freesheets. Metro is published by a newspaper group and carries advertising. Therefore, the notion that somehow local authorities are responsible for the difficulties is ludicrous.

Even if local authority publications constituted competition, to what extent would it be unfair? Is it unfair because the publication is free, or in some other way? Are advertisers not able to make a commercial judgment about what would suit them better? I should have thought that that was central to government policy. The proposal to dismiss the Government’s suggestions here would not constitute a breach of the coalition agreement because there is no evidence that the unfair competition part is at all relevant to what the Government are trying to do.

There is another issue. The Government’s proposals would apply to the code, but the code can change. We do not know what restrictions the next code will bring in. Most of the code, as it stands, is fairly reasonable and acceptable. I dispute the necessity to limit titles to four publications a year, but most of the rest is fairly balanced. What is to stop the Government tightening the code and deciding on a range of things beyond those that they now say should not be published—or, conversely, should be published—in local newspapers? This would give a blank cheque to a Secretary of State to tie the hands of democratically elected local authorities in terms of how they communicate to their electorate, who, after all, should have the final say in what is done locally.

Of all Secretaries of State, the present one is the last person I would like to see entrusted with those powers. I would be quite happy, or relatively happy, for the noble Baroness to have that power but I would not be at all happy to have the present Secretary of State exercising it. Nothing in the Bill would prevent him tightening up the code and using this mechanism to ensure that it is enforced. My preference is for the whole clause to go. I am anticipating what may be said, perhaps rather more briefly, in a subsequent debate. The noble Lord’s amendment would moderate the damage but in my view he should have stuck to his guns and his party’s principles and recognised that he would not breach the coalition in so doing. Then we could have perhaps exercised a bit more leverage on his coalition partners, for the time being, and improved the Bill rather than allowing it to go forward to the statute book in its present form.

--- Later in debate ---

[Lord Shipley]

My Lords, I speak in support of Amendment 43, and will be brief. I agree with the noble Lord, Lord Beecham. I think it is bad policy to backdate the definition of an excessive council tax rise so that it includes a levy from April 2013. I understand that in January this year letters were sent out to local authorities suggesting that the Government might take this course of action. I will say two things about that. The first is that it is simply not enough notice. Council tax-setting takes much longer than just a few weeks. There is a requirement that council tax is effectively set by the beginning of March, so that bills can be sent out. In my view, given the lengthy periods of consultation that local authorities are required to undertake, a period of six months would have been more reasonable.

My second reason for objecting to the Bill as it stands is that one should have respect for the law at the time at which the law is applied. I believe that councils and levying authorities abided by the law at the time. As the noble Lord, Lord Beecham, quite rightly pointed out, it is a comparatively small problem. Retrospective change, whether or not there was a warning, seems to me to be wrong in principle, and should therefore be resisted. The noble Lord, Lord Beecham, said that he felt that the Government were overreacting. I concur with that, because I believe that it is an overreaction to backdate in the way the Government propose.

[The Earl of Lytton]

My Lords, since my name is to Amendment 43, I would like to voice my support for the point that has just been made, and was also made by the noble Lord, Lord Beecham, about the undesirability of retrospection. Notwithstanding the comments made by the Minister at a previous stage of the Bill, there is no question in my mind that Clause 39(15) and (16) are, beyond peradventure, retroactive in their effects. Apart from the self-evident difficulties that that will create within the continuum of local government finance, one supposes that there must be some reason why this has been put in the Bill. I would like to inquire what that reason is, because to date we seem to have had reassurance that there is no intention that this should be retrospective. I do not wish to work out how many angels dance on the head of a pin between retrospection and retroactivity, but I prefer the term “retroactive”.

It seems to me that this is almost calculatedly destabilising, and I cannot believe that that was really the intention. It seems to me that there is a necessity for some further words of qualification, so that the clause is targeted at whichever particular issue needs it, and it is not capable of any sort of generic destabilisation of previous years of local government finance settled business, or what should be settled business. I hope the noble Baroness will be able to give an explanation.