Localism Bill

Lord Greaves Excerpts

Tuesday 5th July 2011 Lords Chamber

[Lord Greaves]

My Lords, I have added my name to amendments in this group and I agree with everything that the noble Lord, Lord Jenkin, has said.

I am sure that most Members of this Committee, never mind the whole House, will not spend a lot of time reading the details of Schedule 5 to the Bill and all the ways in which the Secretary of State will be able to lay down very detailed powers and instructions for local authorities on how to carry out council tax referendums. However, these measures are extraordinary, and typical of a huge amount in the Bill. If the Bill constitutes localism, it is extremely detailed top-down localism.

I have seven amendments in this group, six of which are effectively the same. They seek to remove the description of high council tax increases as “excessive”. The Bill says that if a council wants to impose a council tax increase which is higher than the Secretary of State thinks is appropriate, as agreed by the House of Commons, it will be described as excessive. This is bad legislation. The word is prejudicial rather than neutral and is almost a slogan. One of the things that the Secretary of State will be able to do is to determine the question in any referendum that takes place. I can imagine a question such as, “Do you agree with your council that they should impose an excessive rise in the council tax this year?”. That is the effect of “excessive”. Legislation should be neutral and should not use such words. My amendments seek to delete “excessive” and replace it with,

“higher than the level recommended by the Secretary of State under the provisions of this Chapter”.

That is what the legislation should say. It should be value neutral and simply set out what the position is. Of course, if the noble Lord’s amendments were all passed, mine would be pre-empted and would fall. I would be delighted if that were the case as I would rather not have these detailed prescriptions there in the first place. However, if we are going to have them, we should use proper language and not political slogans.

My Amendment 129LABA concerns the date of the referendum. It probes the Secretary of State’s ability to lay down detailed instructions on this and seeks to ascertain why councils cannot be left to deal with this themselves. However, this is in effect already covered by the rather more sweeping amendments of the noble Lord, Lord Jenkin, and therefore I do not need to speak to it further.

[Lord McKenzie of Luton]

My Lords, first, I wish to speak to the amendments spoken to by the noble Lord, Lord Greaves, with which we sympathise. It is not just a case of semantics and of substituting one form of words for another. For the reason that he has outlined, we agree with him that if “excessive” is used in the legislation it will inevitably end up in the question that is put to the voters in a referendum, as it would be the technical term. We are denying local authorities the right to campaign for the council tax increase that they want. If we want to approach this matter in a neutral way, the very least we can do is to remove prejudicial legislation, as the noble Lord termed it.

The Minister may well say that “excessive” is not a new term and that it is embodied in the current capping legislation. However, there is a difference between that position and what may happen in the future because the current arrangements for capping will not be put to a popular vote. Therefore, that term is effectively an internal term rather than one that would inevitably feature in the referendum question on some basis or other. For that reason, I believe that we need to recast the term that is in the legislation.

I agree with the noble Lord, Lord Jenkin. It is a central point of our concern with this legislation that it is stuffed with detailed powers and that the Secretary of State has to draw back from the nominal rights that it is seeking to give to local authorities. I doubt whether the gap between finishing Committee in July—if we do—and Report in September is long enough to unpick some of the stuff that has come from our discussions today, but at least there is perhaps a longer gap than usual. Our attitude to the amendments of the noble Lord, Lord Jenkin, depends on precisely where the Government are on this. When last Thursday we had our first canter around the issue of capping powers, it was said that all Governments of all persuasions had held to themselves a reserve power. If in fact it is the Government’s position that they are eschewing that power, we do not feel obligated to hold to the position that I think I outlined—that it is difficult for us to deny the current Government those powers if we took them in past years. If that is not one of the criteria of the Government, that point falls away. When he responds, perhaps the Minister can tell us whether the Government see the arrangements currently included in the Bill as capping powers, whether they believe that they should have the right to hold those powers, or whether they are, by one formulation or other, happy to let local electors decide on what the appropriate level of council tax should be. If his response is, “Well, we think there should be reserve capping powers and this is what the Bill is about”, that is one thing, but if the argument is that the Bill is about making sure that electors are the final arbiters in this, that helps us in our position on the matter.

I say to the noble Lord, Lord Jenkin, that there is a question about his formulation. Under the Government’s proposition, a level of council tax, if deemed excessive, requires the authority to produce a substitute calculation. As I understand it, a substitute calculation is one that is not excessive. I suppose that most authorities in this position would compute a substitute council tax that was just a smidgen short of what the excessive level would be. I am not quite sure, on the noble Lord’s formulation, what that substitute calculation would be and what would happen in circumstances where there was a referendum, 5 per cent of the electors called for it, and they did not support the level of council tax that was proposed. What are the consequences of that? If the noble Lord could help us with that point, it would be appreciated. It is clear under the Government’s propositions what the consequences would be, but I am not quite sure what the consequences would be under the noble Lord’s formulation.

I think that this has been a very helpful debate. It is incumbent on the Minister to say whether the Government see the powers as capping powers and believe that they need them, or whether that is not their position and this is basically about letting electors decide what the appropriate or inappropriate level of council tax would be.

--- Later in debate ---

[Earl Attlee]

My Lords, I am extremely grateful to the noble Baroness because I passed by my handwritten notes and did not read them out. My noble friend Lord Jenkin set some homework for Ministers during the Recess. We will carefully consider the Committee’s deliberations, and we are grateful for all noble Lords’ counsel, even if we do not agree with all of it.

The amendments in the name of my noble friend Lord Greaves would change the wording of new Section 52ZB so that an authority is no longer required to determine whether it has set an “excessive” increase in council tax. Instead it is required to determine whether the increase is,

“higher than the level recommended by the Secretary of State”.

We consider that it would not be appropriate to change the wording of the new section in that way. The question of whether an authority’s relevant basic amount of council tax for a financial year is excessive will be decided in accordance with a set of principles determined by the Secretary of State and approved by the House of Commons. If an increase in council tax is then set locally that exceeds the level anticipated by those principles, it is perfectly reasonable to call it excessive. The increase might be justified, but the authority will have to persuade the electorate of that. It would be excessive because it exceeded the norm adopted by most authorities. The Government’s policy on this must be set against the background that average council tax increases have been high over the years, and in many years higher than inflation. This Government have taken steps of their own to help move away from this position, notably by funding a council tax freeze for this year. Ultimately, however, the best way to control excessive local expenditure is to make sure the local electorate can put a stop to it.

[Lord Greaves]

The Minister said that it will be up to the local authority to persuade the local electorate of the case that it is putting forward. Is it not the case that local authorities will not be allowed to spend money on campaigning in such referendums?

[Earl Attlee]

My Lords, I am not certain of the details, and I hope we will come to a suitable amendment to debate that.

--- Later in debate ---

[Earl Attlee]

My Lords, I cannot agree with my noble friend's point that it does not have a place in legislation, but I undertake to consider whether the word “excessive” is appropriate in the referendum question.

[Lord Greaves]

I am grateful for that; it is a step forward. If the Government are to do that over the Recess, will they consult the Electoral Commission about that matter, as it is a referendum question?

[Earl Attlee]

My Lords, I think it would be extremely unlikely that we did not take advice from the Electoral Commission.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, I shall speak also to the other amendments in the group. I hope that noble Lords will forgive me if my speech is not so brief. Amendments 129LZB and 129LAB seek an identical wording. The first relates to the substitute calculations of a billing authority, the second to substitute calculations of a precepting authority. Each calls for the inclusion in accruals of non-domestic rates in addition to the redistribution of non-domestic rates. This does no more than make provision for the localisation of the business rate in due course. In the absence of such an adjustment, by what mechanism will these calculations take account of localised business rates, should that be where we end up? Prior to this happening, perhaps the Minister will confirm the position of redistributive non-domestic rates. Will he confirm that currently, taking one year with another, amounts collected are fully redistributed? Will he also confirm that there are no plans or discussions concerning the possibility of charging amounts against the national pool before redistribution?

Amendment 129LAC concerns the recovery of the costs of a referendum. New Section 52ZN(7) allows a billing authority to recover from a precepting authority the cost of holding a referendum. However, new Section 52ZN(8) gives the Secretary of State powers to deny or modify the right of a billing authority to recover such costs. The impact assessment estimates that the cost of a referendum, depending on the size of the local authority and whether other elections are held at the same time, could be between £85,000 and £300,000. Therefore, not inconsiderable sums are at stake. In what circumstances is it envisaged that recovery of referendum expenses would be denied to a billing authority? Does the Minister consider that the term,

“incurred by the billing authority in connection with the referendum”,

will cover the costs of rebilling in the event of a referendum not supporting the level of council tax calculations—in other words, the costs associated not only with the referendum but with its consequences? If the term is not meant to cover that, how is this otherwise catered for?

Amendment 129LE deletes a range of regulation-making powers that the Secretary of State has in connection with a referendum. In this respect, it is more focused and less ambitious than that of the noble Lord, Lord Greaves. The powers extend to the question to be asked; publicity; the limits on expenditure; the conduct of the authority, its members and its officers; when, where and how voting is to take place; how the votes are to be counted; and the disregarding of alterations in a register of electors. Frankly, it is outrageous that these matters cannot be left to an individual local authority. Amendments 129LF and 129LG deal with another matter.

As the legislation currently stands, the Secretary of State has power to determine that the referendum provisions are not to apply, notwithstanding that a council’s tax calculations are, in his view, “excessive”. The Secretary of State can do this if he considers that, without that level of increase, the authority would be,

“unable to discharge its functions … or … to meet its financial obligations”.

Our amendment is an opportunity to probe the meaning of this, but also to argue for an opportunity for a local authority to request an independent assessment of whether the criteria are met. There was limited debate in Committee in the other place on this issue. The line that the Minister was taking was that this safeguard was really only about a crisis or a catastrophe; for example, the collapse of BCCI, where the Western Isles had invested heavily. Clearly there are extreme examples, but where principles are applied to a local authority as part of a category of authorities, they do not sufficiently take account of its specific circumstances.

The Minister discussed the application of this safeguard where it was an issue about the level of services and how they were provided. In the House of Commons Bill Committee of 8 February, col. 440, he argued that local authorities had to set a budget that was lawful and would enable them to fulfil their statutory functions. However, if such a lawful budget was deemed excessive, it would only stand if supported in a referendum; if not, it could logically be the position that the authority would therefore be unable to fulfil its functions. The fact that the Ministers may be satisfied in aggregate that local authorities have been provided with sufficient resources—and we might argue about that—does not mean that each and every one in the same category will be. It may be that a particular authority has encountered issues of provider failure, litigation and redundancy costs, possibly because it is in transition to a delivery model that the Secretary of State might find more acceptable. It may be that some of the issues, for example, relating to contract litigation, where it might be genuinely difficult to provide sufficient information for a realistic assessment in a referendum at a particular point in time, could be in point; indeed, it could be prejudicial to a local authority’s case for it to do so. Sometimes it would difficult to condense quite sophisticated legal issues into information that would accompany a referendum question. So we have two fundamental points that these particular amendments are seeking to probe.

What does the Minister see as the boundaries of the use of these provisions? Discussion at the other end suggested that they were only to be applied in extreme, catastrophic circumstances. We postulated other circumstances—but not routine—where a local authority should not be forced through a referendum with all the costs and uncertainties that this entails. Our amendment, as well as being a probe, also sets out an alternative route for a local authority to benefit from this provision, whatever its boundaries. There should surely be a right to some independent assessment of whether these provisions apply. I would not commit it to the precise mechanism that we have set down; I simply raise the issue of the principle. I beg to move.

[Lord Greaves]

My Lords, I have a later amendment, Amendment 129LEA, which is on its own. I would have included it in this group if I had quite understood what the latter part of the amendment tabled by the noble Lord, Lord McKenzie, was about. The new Section 52ZR, which the Bill would insert into the Local Government Finance Act 1992, provides for the Secretary of State to give a direction,

“that the referendum provisions do not apply”,

because,

“the authority will be unable to discharge its functions in an effective manner or … the authority will be unable to meet its financial obligations”.

When speaking in the stand part debate introduced by my noble friend Lord Shipley last week, the Minister referred to this briefly when he said that these provisions would be used only in very extreme circumstances, such as,

“where the High Court has exercised its powers to appoint a receiver where an authority has failed to service its debt”.—[Official Report, 30/6/11; col. 1971.]

I do not know how often that happens, but I do not think it has happened, certainly in England, in my lifetime. It seems very rare, so I tabled Amendment 129LEA for the purpose that the noble Lord, Lord McKenzie, tabled his amendment: to probe the Government on exactly what kind of circumstances this provision might be used in. In view of that, I will listen carefully to the answer in this grouping, and I will not move my amendment when we get to it.

[Earl Attlee]

My Lords, Amendments 129ZB and 129LAB would add the words “non-domestic rates” to new Section 52ZF(3)(a) and new Section 52ZJ(4)(a). There is no need to do this. The wording “redistributed non-domestic rates” covers the sums that would have to be taken into account in respect of non-domestic rates when an authority carried out its original council tax calculations.

The noble Lord, Lord McKenzie, asked whether amounts of non-domestic rates are fully redistributed. The answer is yes, by virtue of Schedule 8 to the Local Government Finance Act 1988. When making substitute calculations to determine an amount of council tax that is not excessive by reference to the principles under the new Sections 52ZF and 52ZJ, an authority must use the amount determined in its previous calculations for redistributed non-domestic rates. This is because an authority should not be able to change its estimate of the amount it will accrue in the year in respect of redistributed non-domestic rates to calculate an amount of council tax which complies with the excessiveness principles.

--- Later in debate ---

These are very complex but important matters, and if I may I will write if there are any points which I have not covered. In the mean time, I hope noble Lords will feel able to withdraw the amendments at the appropriate point.

[Lord Greaves]

The Minister said that the billing authority—I am thinking in terms of a two-tier area with counties and districts—may be able to recover its costs. Should that not be automatic if the referendum is in relation to the level of council tax set by the county council, for example?

--- Later in debate ---

Moved by

[Lord Greaves]

129V: Clause 68, page 57, line 26, leave out from “with” to end of line 28 and insert “this Chapter”

[Lord Greaves]

My Lords, we now move on to Chapter 3 of Part 4 of the Bill, excitingly titled “Community Right To Challenge”. I have seven more amendments in this group, along with my noble friend Lord Tope, and there are a couple from the Labour Party. These are the first of a series of amendments on this community right to challenge part of the Bill which I am moving on behalf of the Liberal Democrats on the basis of the criterion which the noble Baroness, Lady Andrews, put forward at Second Reading—workability. This is a completely new idea and a completely new set of provisions. It is extremely important that, when they leave this House, they leave in a workable condition. They may already be in a workable condition, or they may not. Our job is to make sure they are, whether or not they require changes.

The basic principle—in rather obscure language, I have to say—is that,

“a relevant authority must consider an expression of interest”

if submitted by a relevant body that is interested in,

“providing or assisting in providing a relevant service”.

I have to say that back in Colne this is not the language people use and, no doubt, when the community right to challenge gets down to the grass roots, people will have a plainer English explanation of what it is all about. The relevant authority is, as set out, a principal local authority in England, or a body set out in Clause 68(2)(d), which reads,

“such other person or body carrying on functions of a public nature as the Secretary of State may specify by regulations”.

Here we have more mysterious regulations specifying mysterious people. Before the Bill leaves this House we need to know who these people are, at the very least.

A “relevant body” is defined as,

“a voluntary or community body … a body of persons or a trust which is established for charitable purposes only … a parish council … two or more employees of that authority”—

in other words, two or more employees of the council whose services are being challenged—

“or … such other person or body as may be specified by the Secretary of State by regulations”.

It is not a surprise to find that there, since it is what we find everywhere in the Bill, but, again, we need to know what it means.

A “relevant service” which is being challenged on the relevant authority by the relevant body is,

“a service provided by or on behalf of that authority in the exercise of any of its functions, other than” …

and “other than” is, effectively, a service that the Secretary of State makes regulations saying shall not be subject to the challenge. Yet again, we have a power to the Secretary of State that we need to understand.

This, in many ways, is the nub of the problem. This is framework legislation, skeletal legislation, and there is a huge amount down to regulations. It might seem boring to keep saying this, but in every part of the Bill this seems to be the fundamental problem. What we have here is a new idea—what I would describe as a spiffing wheeze—that has been dreamt up by the Government. It has actually been dreamt up by the Conservative part of the Government and I do not complain about that; a coalition is a coalition of two parties and each party has a right to bring its own spiffing wheezes to the table. We have to find out how this is to be done as I do not think that we are being told that at the moment. I would like all these specific powers for the Secretary of State to be removed, or at least a lot of them.

Is there any hope that we are going to see draft copies of the regulations before the Bill leaves this House? We do not have them for Committee stage. Will we have them by Report? If we do not have them by then, I can see that there might be a certain amount of bother in the House.

That is all I that I really want to say about this. I have some more notes but they just repeat what I have said, so I will not say it again. The noble Baroness, Lady Farrington, is going to express shock and surprise that I have not said it three times.

[Baroness Farrington of Ribbleton]

Most certainly not. The noble Lord, Lord Greaves, ceased to surprise me about 20 years ago. My point is that it is very helpful for other parts of your Lordships’ House to know when we are dealing with a government view or whether it is a jolly wheeze thought up by one party—on this occasion, according to the noble Lord, by the Conservative Party. I hope that members of the Conservative Party in your Lordships’ House will tell us when a jolly wheeze has their support but not that of the Liberal Democrats. It is a new form of coalition Government, and I am enjoying it.

[Lord Greaves]

The noble Baroness is, unusually, wrong. It is not a new form of coalition Government; it is how most coalitions work. Different parties bring different proposals to the table, compromises and trade-offs are reached and, one hopes, the best ideas from each of the parties come through. All I am saying is that it is no secret that the community right to challenge, as it is now called, and indeed the community assets that we will move on to discuss after this, came from the Conservative Party. I am not criticising that party for that or saying that I do not support it.

When I opened my remarks I said clearly that what we have to do with a new, untried, untested idea is ensure that it is going to work. If it does not, one of two things will happen. A lot of difficulties will be caused on the ground because the idea has not been thought through properly or, alternatively, it will be realised that it has not been thought through properly before these myriad regulations are produced and it will never happen, the regulations will never happen and perhaps the chapter will never be commenced. What I and the Liberal Democrats are trying to do is to be satisfied that the proposals are workable before they leave us so that they are actually a great success when they go out there.

[Lord Beecham]

My Lords, the amendments in my name start with Amendment 130ZBA. In estate agents’ parlance, the key to property is always described as “location, location, location”. When it comes to this legislation and the work of the Civil Service in advising Ministers, the phrase seems to be “regulation, regulation, regulation”, and it is to that that this amendment is addressed. The purpose of Amendment 130ZBA is to require the Secretary of State, before making regulations prescribing which services may be tendered and which not after an expression of interest, to consult with the Local Government Association or any public bodies to which the relevant section would apply. That echoes pleas that fell on unsurprisingly deaf ears last night in this Chamber on the police reform Bill where similar requirements were sought that the Home Secretary would require that police commissioners consulted with local authorities in respect of various matters. That did not appeal to Ministers but I rather hope that on this occasion Ministers will acknowledge that it would be sensible and right for the Secretary of State, before making regulations around this issue and indeed others in the Bill, to consult with a representative body for local government.

The second amendment would simply take out Clause 68(9). It is similarly designed to reduce the regulatory function to which other noble Lords—the noble Lords, Lord Jenkin and Lord Greaves—have referred. I hope the Government will acknowledge that no harm will be done to them, and indeed the general tenor of the legislation will be improved, if they were to accept these amendments.

[Baroness Hamwee]

My Lords, I am sure that they use plain English in Colne. I imagine that it is very direct language, and I very much doubt that they use the term “spiffing wheeze” or “jolly wheeze”. My noble friend may have forgotten that the department has actually issued a plain English guide to the Bill.

[Lord Greaves]

A lot of people in Colne used to read the Beano.

[Baroness Hamwee]

But do they read the plain English guide to the Localism Bill? That says, on the community right to challenge, that many local authorities,

“recognise the potential of social enterprises”.

I hope that my noble friend Lord Shutt of Greetland, who I think will respond to the debate, will be able to say a word about whether in the Government’s mind social enterprises are something different from community groups. Many social enterprises are in fact businesses. That is not a criticism, but they are very different from community groups. The application of these provisions to social enterprises is interesting. The guide refers to them providing,

“high-quality services at good value”,

and delivering services “with”—that is, with local authorities—“and through them”. I was interested in the “with”, which, in the legislation, finds its manifestation in,

“assisting in providing a relevant service”.

I do not know whether my noble friend is able at this stage—we may need to wait for the regulations, which I, like the noble Lord, Lord Greaves, hope to see before too long—to explain what that assistance might look like.

--- Later in debate ---

[Lord Beecham]

The noble Lord may recall that I have an amendment dealing with precisely that matter, which we will discuss later.

[Lord Greaves]

My noble friends Lady Hamwee and the Minister are straying on to matters covered by future amendments. I remind my noble friend that she might have suggested some of those amendments. As for the idea that this is all about letting 1,000 flowers bloom, I invite my noble friend the Minister to come on over the tops and have a look at Colne at the moment. It is in an absolutely beautiful condition thanks to Colne in Bloom. There is a massive display of flowers; far more than 1,000. On the other hand, letting 1,000 flowers bloom did not do much good for Mao Tse-Tung. It has different connotations.

The Minister referred to recent consultations. Can he give us an assurance that the Government will publish a pretty full account of the results of those consultations and the evidence that they got? Will it be possible to access them?

[Lord Shutt of Greetland]

I do not have it to hand, but I am pretty certain that they are to be published on 2 August. I think that that is the statutory date when the results of the consultation must be published so that people know what people have had to say, so that will be done.

--- Later in debate ---

[Lord Greaves]

Will what is published be a pretty good summary of what people said in the consultation, as well as of the Government's views? I think that the Minister is saying yes to that. That is good news, as was the fact that the Minister said that the department will endeavour to prepare draft regulations. People may have to work hard over the summer; some of us will be watching from the south of France.

The Minister referred to unnecessary, burdensome information required by a recalcitrant authority. That is the same way of thinking: that councils cannot be trusted to do things right, that some of them will be recalcitrant and that therefore everybody, even the great majority who will do it right anyway, must be lumbered with the alternative unnecessary, burdensome information, which is all the rules and regulations which come from central government to councils.

We are aware that the Department for Communities and Local Government is losing a lot of its staff. Who and where are the staff who will be employed to produce all that vast range of new rules and regulations—which, in our view, are unnecessary? We are not saying under any circumstances that there is no need for regulations, Secretary of State orders or secondary legislation. We are saying that the scale and amount of it is out of hand and will be more so as a result of the Bill.

The Minister rightly said that we are in favour of pushing power down into communities, and that expressions of interest should not be rejected out of hand. We all agree with that, but many later amendments in this part are about safeguards to ensure that the process will not be dangerous or cause difficulties and problems. We will come to those.

The Minister said that councils need to keep up to date and, for example, reflect the types of organisation representative of their communities. I am sure that that can be done without taking all those extra powers. The problem is that if the power for regulations is there, regulations will be produced, in some cases at great length. Far from keeping councils in order, in many cases they will simply prevent councils doing things in the best way for their local circumstances.

My final point, to which, again, we will come, is that the Minister said that some powers are to make it possible for the Secretary of State to exclude additional services from the challenge. The problem is that we do not know which services will be included and which will not. Again, we will come to amendments that will probe that.

It has been a useful introduction. I say thank you to noble Lords who have taken part and to the Minister for his attempt to be helpful. I beg leave to withdraw the amendment.

Amendment 129V withdrawn.

--- Later in debate ---

[Lord Shutt of Greetland]

My Lords, this is the other side of the coin in terms of whether one is being too prescriptive. This amendment would require a relevant body to demonstrate that a substantial number of service users support its proposal when submitting an expression of interest. This puts an unnecessary burden on relevant bodies, and the relevant authority if it must verify the information. Where more than one relevant body submits an expression of interest, service users could be approached several times, which may be frustrating and confusing. This will be magnified by the fact that local people will use many different services. We agree that expressions of interest should reflect the needs of service users. Relevant bodies will often have excellent insight into these needs. The Bill enables relevant authorities to specify periods for the submission of expressions of interest in particular services. They could, for example, set periods that would enable relevant bodies to take into account the results of any consultation with service users, undertaken as part of the commissioning cycle. We are considering how service-user needs might be reflected in the requirements for an expression of interest. I hope, under these circumstances, that the Minister will feel it appropriate not to press the amendment.

[Lord Greaves]

The Minister said that more than one relevant body might submit an expression of interest in a particular service at any given time. I am trying to think of an example. Two community groups might be interested in taking over a particular park. They might be at daggers drawn and they will not want to put in a joint bid. How does the authority decide between those two community groups? I am trying to avoid using words like “relevant bodies”. Anybody out there listening to this discussion will not have the slightest clue what we mean by “relevant authorities”, “relevant bodies” and “relevant services”. But if two community groups want to run the same park—for example, because it is on the border of two quite different areas—how does the council decide which one to deal with?

[Lord Shutt of Greetland]

My Lords, the council concerned will have its own procedures for dealing with these things, but the chances are that one submission will be better than the other. If they are bang on equal, it might come down to price, but councils have their own decision-making ways. If the submissions are almost identical, councils will just have to look at them with great care. But it would be strange if they were identical. One could look at what lies behind the application, the strength of the body, whether it looks sustainable and whether the committee of the organisation looks as if it is there for the long haul. I am quite certain that these are all things the authority will be looking at.

--- Later in debate ---

[Lord Shutt of Greetland]

The noble Lord is asking, in effect, to put a regulation into the Bill. The government line is that we do not need it in the Bill and therefore this is regulation-free.

[Lord Greaves]

To go back to the question I asked, the answer my noble friend gave is probably OK if the two applications come in at the same time or within the same council cycle so that they can be discussed by whatever procedures a particular council has to deal with these matters. But does the Bill not say that once an application has been accepted and is being considered, no more applications for the same thing can be made and accepted? Therefore, if one came in today and the other came in a couple of months later, perhaps in response to the knowledge that the first one had gone in, it could not be accepted. How would that be dealt with?

--- Later in debate ---

[The Deputy Chairman of Committees (Viscount Ullswater)]

My Lords, I must advise your Lordships that if this amendment is agreed to I will not be able to call Amendment 130ZA because of pre-emption.

[Lord Greaves]

My Lords, I have Amendment 130ZC in this group, which I will speak to in a minute. Before I do, I want to say that I think we agree with a very great deal, if not everything, of what the noble Lord, Lord Jenkin, has just said. We certainly agree with the broad thrust of his amendments. It seems illogical that if there is to be a system in which local people can, in the terminology here, challenge the existing providers of a service and suggest that they might do it better, that should be only for services that are provided by local government, not by other public bodies, because when it comes down to it services provided by local government, as opposed to other public bodies, are fairly arbitrary. There are good reasons for a lot of them, but for some of them it is not very clear why local government does them and someone else does not. It is certainly not clear why someone else does a lot of things and local government does not in this country. The division is arbitrary and it seems to me that the relevant criteria should be whether it is a local service and then whether it is desirable that this should apply to it.

We agree very substantially with the noble Lord’s Amendment 130, and with his Amendment 131, which would allow a local authority on behalf of its community to take over in appropriate places. Of course, there is a great question mark over how funding is going to be arranged. You immediately get into all sorts of questions about whether there would be ring-fenced funding for a particular service or whether it would be rolled up in the general local government grant, the existing formula funding or whatever is going to replace it, and how that would be organised. Nevertheless, those are not insuperable problems. Initially, one assumes that there would be ring-fenced funding for particular services that were transferred, but the basic principle is something that we would certainly support.

The noble Lord is not enthusiastic about his Amendment 132 requiring local authorities to produce a list of challengeable services. He suggested that it is bureaucratic. However, there is certainly another side of that coin because the Government are going to lay down a list of services that are not challengeable and that are excluded. Indeed, they are going to give themselves power in regulations to change that list from time to time, as we have already discussed. If people know what they cannot challenge, presumably they can work out what they can challenge, so it is not really a problem and the noble Lord’s amendment is probably unnecessary, whether or not it elicits enthusiasm.

My Amendment 130ZC would allow a district council in a two-tier area to challenge the county council and to suggest in certain circumstances that it could take over county services. There is an ongoing argument in some areas between districts and counties about what counties do and what districts do. In my own county of Lancashire, there was a great deal of devolution from the county to the districts in 1974. It simply followed existing practice with the old municipal boroughs and even some of the larger urban districts in the county. In recent years, the county council has been pulling services back and taking them to the centre, even though it is a large, far-flung council. I do not know exactly how far it is from north to south, but it cannot be far off 80 or 100 miles, and it is 60 or 70 miles from east to west, so it is a huge county. It is also an area with strong districts, some of which used to be county boroughs and are still resentful of having been downgraded, and some of which have always been strong municipal boroughs and are now the basis of strong districts.

District councils across the country vary hugely. Some are, frankly, quite feeble and weak affairs, and others try to behave as if they were unitary authorities but do not quite get away with it. Nevertheless, there are a lot of services that it can be argued would be better run at a local level and which in many cases have been. An example is local highway functions that cover not the main roads but local streets. In Lancashire, they were run by most of the districts until three or four years ago when the county decided to take most highway powers back to itself. Demonstrably, the system has not improved since then. Some would say that it has not got worse, but others might disagree with that. It is an area that could be challenged.

The whole area of leisure and recreation has a very local base to it in many cases. One example is country parks. Having a network of country parks across a wide council might be the best way to do it, or country parks might best be run at a local level and involving local people.

[Lord Moynihan]

I am grateful to my noble friend for raising that. Very briefly, a classic example of this are the national sport centres, which initially were set up to focus on excellence in sport and did so for many decades but which increasingly have come to serve the local community through community use and Sport for All. These are surely very good examples of where you can be far more aligned to local authorities—if they are run by local authorities—working with local clubs and with local governing bodies while protecting high-performance sport.

[Lord Greaves]

I am grateful to my noble friend for that intervention. Libraries are an example of this. In some parts of the country they are very controversial at the moment because they are being closed down on quite a large scale, while in other places they are not. So long as the existing funding for a library may be transferred to districts, there is no reason at all why districts cannot take libraries over. Indeed, the municipal boroughs before 1974 were the library authorities, and many of the fairly new libraries that now exist were built by the boroughs and not by the county council. If the county council is seriously looking at reorganising its library service, one of the ways in which it could perhaps increase the efficiency of libraries and local involvement in them is by transferring at least some of them to the districts. I am not saying that that is an ideal solution everywhere, but it is something that ought to be challengeable. There are a number of things like that.

As for national services, the ward I represent on the council had a recent problem of raw sewage flowing down from an inefficient septic tank system on a caravan site on a hillside and causing real problems to residents in the lane below. Noble Lords can imagine what their back gardens were like—not very pleasant at all. The Environment Agency became involved in this. It came and went and came and went, and the district council, which has no direct responsibility for it, became involved, and in the end it was the district council that actually organised the system, spent the money and connected the caravan site to the main sewage system. It then recharged the people who lived on the site and the people who own it. It was the district council that actually sorted it out on the ground, even though, as far as I could work out, the statutory responsibility lay with the Environment Agency. That is a classic example of the kind of service that, if transferred at a local level to a competent local council, might well be run better.

As for the river system, the Environment Agency is responsible for main rivers, but certainly in our part of the world some of the things that are classified as main rivers are tiny little streams. There is no reason at all why they should not be the responsibility of the district council. The district council has no statutory responsibility for rivers and it is not funded by government for it, but some district councils employ drainage officers because they are the sensible people on the ground who sort out flooding and drainage problems when they occur. How much better if they were actually statutorily responsible for it? I therefore support the noble Lord’s amendment with some enthusiasm, and put mine forward with enthusiasm as well.

[Lord True]

My Lords, I put my name to the first of the two amendments tabled by the noble Lord, Lord Jenkin, and I endorse all that he said. I can imagine my noble friends the Ministers saying that it is not possible to graft this on to the Bill at this stage, but the principle is a very good one, as my noble friends Lord Greaves and Lord Moynihan have also said. If the Ministers cannot accede to these amendments now, I hope that they might be prepared between now and Report to talk to local authorities and local government associations about ways in which local authorities might be given opportunities to suggest ways of localising more services.

I must apologise—and this may be a relief to some—that I have to attend a full council meeting later this evening, and if I am not in my place at 7 pm, with the less-than-coalitionist ardour that there is on opposition benches in Richmond I might find that a division is called. I could not support my noble friend on the list of challengeable services because—and he has made this point—it would cause bureaucratic problems for local authorities. I did not put down amendments to Clause 74, which comes later, because it would have been discourteous, anticipating that I was not going to be here. However, I must say that the other form of list that your Lordships will discuss later this evening might, in my estimation, need at least two officers to compile these kinds of lists. Therefore, while encouraging my noble friends the Ministers to resist my noble friend’s amendment, I also hope—in anticipation, as it were—that they will think more carefully later about the other lists that are imposed on local authorities in this Bill.

Finally, I support the suggestion about counties and districts, and of course I also support the principle relating to the Greater London Authority and London boroughs. Self-evidently, there are many things—in an earlier debate I gave the example of running high streets —that London boroughs could do far more effectively than a regional authority. I hope again that my noble friends the Ministers will consider that too.

--- Later in debate ---

[Baroness Thornton]

I am standing up to give the noble Lord, Lord Greaves, time to move his amendment, which comes before mine in this group.

[Lord Greaves]

My Lords, if the House is willing to be tolerant, I will admit that I was asleep.

[The Deputy Chairman of Committees]

My Lords, I have called Amendment 130ZD and it was not moved. I now call Amendment 130A.

Amendment 130A

--- Later in debate ---

[Baroness Thornton]

In that case, I will speak to my amendments and give the noble Lord, Lord Greaves, a chance to catch up on his amendments in this group. Before I do so, I declare an interest as an ambassador for Sporta, the trade group of social enterprises which deals with local sports and leisure services, and as the founding chair of the Social Enterprise Coalition. I shall speak to Amendments 130A and 131A, and comment on some other amendments in this group, although I may leave that until they have been spoken to. My noble friend Lord Patel is right to say that Clause 68 is important. I have always believed that socially owned businesses, founded and run in this case by local people, have an important and valuable role to play in the provision of public services.

Amendment 130A seeks to put beyond doubt the kind of enterprise which can challenge and be considered appropriate to contract for the services under consideration. I seek clarification from the Minister about this because, as it stands, it seems that the expression of interest could be used by local authority employees setting up a private company. I believe that that might be a loophole that would need to be closed. Amendment 130A states that,

“after ‘authority’ insert ‘who have formed an organisation for charitable purposes or a community interest company or industrial and provident society’”.

That covers basically all the organisations that are not private enterprises.

Amendment 131A again seeks to make completely clear an issue which is, in a way, about the size of the organisation. I believe that there should be a requirement that the expression of interest can be initiated by a local organisation or in collaboration with a local organisation. Many national charities already provide and contract for services at a local level—for example, Barnardo’s and Action for Children, which I know about through a long association with them. I believe that those national charities, along with any national social enterprise—indeed, there are those that are contracting which are building social businesses providing social care—would want to contract for those services at a local level. But they have to prove that they are working collaboratively with local agencies to provide locally integrated solutions.

This would still allow national organisations, which have great skills and experience in delivering these services, to bid but would ensure that the Bill meets its main objective of devolving power and giving a voice to local communities. The involvement of a national social enterprise or a national charity may be the difference between a local body being able to challenge and contract for local services and it not having the capacity to do so. It is important that large and small, and local and national, collaborative working is part of this Bill and is put beyond doubt. That is what these two amendments are about. I beg to move.

[Lord Greaves]

My Lords, I apologise for falling asleep; it is these Zs all over the place which are doing it. I am not speaking to Amendment 130ZD, which I missed. However, Amendment 133ZN has exactly the same meaning. I was going to apologise for putting down the same amendment twice in the group but it seems that that was providential. I certainly have a great deal of sympathy and support for what the noble Baroness, Lady Thornton, has just said.

We put down amendments to take out the reference to employees not because we do not think that in appropriate circumstances it is a good idea for employees to take over running the services for which they are employed, but because we are not at all convinced that this Bill is the best place to legislate for employee buy-outs, employee buy-ins, employee takeovers or whatever. They do not quite fit with the concept of the community—however the community or somebody in the community is defined—making a challenge and saying, “We can run this service. Can we have a go please?”. Employees are very different in that sense as they represent the producer side of the service rather than the consumer side and, clearly, if consumers or citizens or residents take over a service, they become producers as well. Equally, employees can make the same journey in the other direction.

--- Later in debate ---

[Lord Shutt of Greetland]

My Lords, I understand what the noble Baroness is saying, but there is a concern about being overprescriptive. It is important that we do not do anything to put employees off. We can return to this; there is no reason why not; but we know what the intention is. It is to free up the opportunity for employees to take part in a right to challenge. I am far from certain that we should be prescribing that there are these various routes and it is outside the theology if they take the fifth route and not routes one to four. We need to be a bit careful about that.

[Lord Greaves]

If there are not to be clear structures which are recognised as appropriate, how do you prevent the situation in which two employees make a right to challenge when they have absolutely no support from the rest of the employees, but because they have made the right to challenge, the process has to take place?

[Lord Beecham]

Before the noble Lord replies, may I point out that I have an amendment dealing with precisely that matter as well?

--- Later in debate ---

Moved by

[Lord Greaves]

131D: Clause 68, page 58, line 17, at end insert—
“( ) This section does not apply to any company or other body or person the activities of which are carried out for profit.”

[Lord Greaves]

My Lords, I was very carefully not saying “Not moved” to any of those previous amendments.

I rise to move Amendment 131D, which is grouped with Amendment 131ZP and with the question on whether Clause 73 should stand part, which is to be moved by the noble Lord, Lord Patel, which should lead to another interesting debate. Amendment 131D is a probing amendment to stimulate a discussion which follows on from the discussion we have just been having about the nature of the organisations which might end up running local services, whether they are very local services, such as looking after a pocket park, or much more substantial services, such as taking over refuse collection. In relation to “relevant bodies”—in other words, the bodies that are challenging to take over services—my amendment would add the words:

“This section does not apply to any company or person the activities of which are carried out for profit”.

It is clear that there is not an absolute distinction between profit-making and non-profit-making bodies. We have already discussed the way non-profit-making bodies might make a surplus, but for the purposes of discussion, that is fair enough. Amendment 133ZP is a belt-and-braces amendment, which would insert the same wording at the end of Clause 73.

The fear about the proposed community right to challenge—and there is a lot of fear about the proposal—is that it will lead to the fragmentation, privatisation and commercialisation of a lot of council services; that, in the name of the community making the challenge and as a result of local community organisations, parish councils and whatever putting in the first challenge, the big boys will then come galloping in. The noble Lord referred to the risk of non-local bodies moving into the area. Perhaps there is a risk of local commercial organisations of a slightly cowboy variety, or, more likely, large corporate companies, coming in and taking over, all in the name of the community.

--- Later in debate ---

[Lord Shutt of Greetland]

My Lords, I understand the point that the noble Baroness is making. I will bear it in mind and take it back to the department.

[Lord Greaves]

My Lords, I thought that this group might lead to an interesting discussion. We have had an interesting discussion, which I do not think can end today. I have the sense that of all the groups we have discussed so far, this is the one on which my noble friend the Minister has batted on something of a sticky wicket. However, like a good Yorkshireman, he has rightly batted with a straight bat. There have been a few Bradfordians in the Committee today. The noble Baroness, Lady Eaton, has just gone but there are still a few of us left. The Minister does not quite qualify as a Bradfordian by a couple of miles, but he is still using a straight bat.

There are two fundamental issues in this group. One was raised by the noble Lord, Lord Patel of Bradford. The question of how this money is going to be handed out, to whom and what criteria will apply is very important. As we are all Bradfordians, I shall talk about Leeds. If there is an agreement between Leeds council and a big community-based group which would like to take over a lot of community-based services, and that happens, it seems to me very appropriate for government money to be used to assist that process. The process will proceed on the basis of co-operation and people agreeing that a particular group requires help and assistance to build up its capacity. However, if the money is handed out to large national organisations, whether they be charities or other bodies, in order to make speculative challenges or to come in after the challenge phase as part of the procurement for large-scale services such as children’s services or adult care services in large authorities, that would seem to me a less desirable use of the money. If it is to be used in relatively small or medium-sized amounts to bolster local community-based groups, that seems to me a good use of government money. However, I have problems with this provision being part and parcel of large national organisations taking over local services. That is the kind of thing that we shall have to probe further.

However, the fundamental issue in my amendments has not been confronted. My noble friend the Minister stated clearly that large commercial organisations, multinationals or others, will not be able to take part in the community right to challenge and will not be able to make expressions of interest. We all understand that but the problem arises at a later stage if it is a challenge for a service that costs £1 million a year to run and therefore has to be put out to a tendering process. As far as I can see, that would be very like the competitive tendering processes which used to be compulsory, and which some councils still carry out in order to get the best value because that is the way they want to do it. If that is to happen on a compulsory basis as a result of what was initially a community right to challenge, a problem will arise. Procurement does not appear in the Bill. I have been looking at where it might appear. Clause 72 is headed “Supplementary”. Clause 72(1) states:

“The Secretary of State may by regulations make further provision about the consideration by a relevant authority of an expression of interest submitted by a relevant body”.

That seems to allow the Secretary of State to make any regulations he wants about the whole procurement process. Clause 72(2) states that a relevant authority must,

“have regard to guidance issued by the Secretary of State”,

which, as we know, comprises instructions and does not even come to this place for us to nod it through. There are real issues here about the procurement process. If it is to be not in the Bill but in the regulations, the procurement regulations—if there are to be any—have to be among the regulations that the Minister manages to dredge out of the department before we get to Report. On that basis, I beg leave to withdraw the amendment.

Amendment 131D withdrawn.

--- Later in debate ---

Moved by

[Lord Greaves]

131J: Clause 68, page 58, line 23, at end insert—
“regarding services provided on behalf of more than one authority jointly”

[Lord Greaves]

This amendment is the first in a group of four amendments. In moving it, I will also speak to the three others. It is a miscellaneous group of different things that I put together to avoid getting leant on by the Whips. I think I can deal with these fairly quickly.

Amendment 131J is about how to deal with services provided by more than one authority jointly. The two adjoining authorities might be a district and a county in a two-tier system. I have a number of examples of that; I do not think I need to read them all out, but they include leisure facilities. Amendment 131K is about how the Government are going to review what is going on. This is an all new, untried and untested system that, we assume, will be brought into operation across the whole country at the same time, and the amendment is about how the Government are going to have a continuous review of what is going on, and continuous consultation with local authorities on how it is happening.

Amendment 133ZK provides more regulations and restrictions. It is about the rejection of an expression of interest. It seems to me that there are two stages at which things can be rejected. One stage is where the expression of interest is made and the authority can simply say, “We are rejecting the expression of interest and are going no further”. At the moment, Clause 70(8) says:

“The relevant authority may reject the expression of interest only on one or more grounds specified by the Secretary of State by regulations.”

That is crucial. Again, it would help if we could know what those regulations are; they ought to be in the Bill. The second stage is procurement, which we have been talking about.

Amendment 133ZL is a provision by which the relevant authority, the council, can carry on as before with the exercise, even if the relevant body—the community body or the parish council—withdraws its expression of interest or refuses to agree to modify the expression of interest. It is an indication yet again that once the process has started, it will continue and be very difficult to stop. That is, I think, of concern to some of us. We can see a situation in which a community organisation as defined is persuaded to put in its expression of interest. It is not really interested at all, but it gets the process going and is in league with one of the big boys, a big commercial organisation, which, if the figure is over £156,000, will then come in and try to clean up. There are real concerns that there are loopholes here that need looking at before the system is unleashed. I beg to move.

[Lord Shutt of Greetland]

Amendment 133ZK would remove the Secretary of State’s power to specify in regulations the grounds for rejecting an expression of interest. We have taken this power to ensure that power really is pushed down into the hands of communities. The majority of relevant authorities will of course act within the spirit of the right, but the power to specify the grounds on which an expression of interest could be rejected prevents a recalcitrant authority from rejecting it out of hand and defeating the purpose of the right. I accept that, as my noble friend indicates, we are back to regulations.

Amendment 131J would give a Secretary of State a power to make provision in relation to services that are provided jointly by authorities in regulations. We would expect relevant authorities to take a common-sense approach to services that are provided jointly, and to agree together a period during which expressions of interest could be submitted and arrangements made for considering them and for carrying out any subsequent procurement exercise. However, provision in relation to jointly provided services can already be made if necessary under the powers in Clause 72.

Amendment 131K would require the Secretary of State to consult representatives of relevant authorities when making regulations of guidance, and to have regard to their views. We have recently concluded a consultation, with all those with an interest in the right, on our proposals to use the various powers that we have taken. We will consider the need for consultation on future changes.

Amendment 133ZL would remove the authority under this chapter for a relevant authority to undertake a procurement exercise when an expression of interest has been withdrawn or a relevant body does not agree to modifications to it proposed by a relevant authority, meaning that it has to be rejected rather than accepted. An authority might wish to carry out a procurement exercise in these situations if, for example, it is attractive to the type of service delivery set out in the expression of interest and if the authority wants to initiate a procurement exercise anyway, or if services are currently contracted out and the company needs to undertake a procurement exercise in order to maintain service continuity. Clause 71(7) provides clarity in stating that a relevant authority may determine whether to carry out a procurement exercise where an expression of interest has been withdrawn. I hope that that will persuade my noble friend to withdraw his amendment.

[Lord Greaves]

My lords, I will withdraw it in a minute. However, I will, as always, read carefully what my noble friend has said and decide whether any of the amendments in the group need further pursuit.

The more I hear this debate, the more I am concerned about the word “challenge”. I think “challenge” is wrong because it is an adversarial word. If any of these arrangements are going to work, there will have to be a willingness on both sides—that is to say, on the part of councils and the organisations that are making a bid to run services—to make them work. There has to be co-operation. If that is not there, frankly the arrangements are not going to work very successfully. What is needed more than anything else in many places is a culture change, which can best be created by people exhorting, explaining, being enthusiastic and persuading, rather than having hundreds of thousands of words telling people in detail what to do. If people do not like what they are doing, they will do it grumpily, and it will not work very well.

The only question I will ask my noble friend the Minister concerns all this talk of recalcitrant authorities. What estimate have the Government made of the number of local authorities which they expect to be recalcitrant in relation to this particular part of the Bill?

[Lord Shutt of Greetland]

I have no idea whether there is any estimate. When starting afresh with a new proposal, one of the things I think to myself is, “Could local government have done this anyway? Could it have said, ‘It could be that all sorts of bodies could do things rather better than us. Can we find ways in which we can give these opportunities?’”. I am doubtful that I have heard the answer. Therefore, because this has never been done, there might be a perception that this is the sort of thing that local government would not get up to on its own. The authorities could be recalcitrant in those circumstances, but in general I do not know, and I suspect that the calculation is not there because I do not see how you could get that calculation. However, it is worth looking at what has happened to date.

--- Later in debate ---

[Lord Greaves]

The Minister is tempting me to go into a whole new area, which I will resist, except simply to say that there is a culture in local government nowadays that is very different from what it was 30 or 40 years ago; you do not do anything at all, on anything and in any way, unless you have permission from the Government or the regional office, which has now been abolished, or someone else up there, to do it. People are scared to death of doing things because they have lawyers who tell them that not only can they not find the power in the legislation; they cannot find the instruction in the legislation and all the stuff that tells them exactly how to do it. That is the problem in local government now; it is in detailed bureaucratic thrall to central government, and we are about to pass a Bill that increases that.

Having made that counterpoint to what my noble friend said—which might have some justification but is, I think, part and parcel of the fact that people in Whitehall do not believe that local government can ever be trusted to do anything useful or sensible unless they are told how to do it as if they were in kindergarten—I beg leave to withdraw the amendment.

Amendment 131J withdrawn.

--- Later in debate ---

[Lord Newton of Braintree]

Prompted again by what I have heard—I hope that this is not out of order, because it raises a point about the clause with which we have just finished—this is the first reference I have seen to town councils as distinct from parish councils. Town councils are not specified as relevant bodies in the previous clause; they are included in the new clause. What is the position of town councils under the Bill?

[Lord Greaves]

My Lords, legally, town councils are parish councils. I think that is the answer the Minister will give. It is true, anyway. The noble Earl, Lord Lytton, is poised to come in again. A town council is a parish council that has passed a resolution under about three lines of the Local Government Act 1972 to call itself a town council. It can have a town mayor if it wishes, but it does not have to. I think that is all there is to say about it, but the noble Earl might have other things to say.

I strongly support the amendment moved by the noble Lord, Lord Lucas. It is ridiculous if a parish council can put in a lot of time and effort to consider taking over local services, has to do it through the expression of interest procedure and can then be outbid by other people. There is no sense in that. The Minister might say that it is unnecessary because if the district, unitary, county or whatever council agrees to it, it can happen anyway. My experience is of a borough council that tries to offload things to the parishes such as public conveniences when the parishes do not want to take them on, but that is a different matter. Throughout local government, there is a culture of conservatism and fear of taking on and doing more things. Changing that culture is the most important thing that we have to do. The amendment would be a very useful addition to the Bill.

[The Earl of Lytton]

My Lords, there is nothing like the words “parish council” to get me out of my seat. Noble Lords will know of my interest in parish and town councils. To answer the first question, the noble Lord, Lord Greaves, is right: fundamentally, structurally, parish and town councils are effectively synonymous. The differences are in the way in which they operate, but structurally in their clerks, membership and rules of engagement with which they have to comply, you can more or less say that the term is synonymous one with the other, except that one happens to apply to a town. It is an area where we have great difficulty with what we might call the family of parish and town councils, because town councils such as Weston-super-Mare have huge budgets and are on a principal authority scale, whereas many tiny rural parishes, although they may have quality parish council status, are extremely small. That lack of consistency makes it very difficult to deal with parishes as a cohesive whole.

I say straight away that I have not conferred with the noble Lord, Lord Lucas. I am very pleased that he has moved this amendment. There are some extremely good examples of where principal authorities have felt that they had the confidence to pass on to a parish or town council a function that they knew could be dealt with readily, cost-effectively and which was well within the capacity of the town or parish council concerned. But I am bound to say that nationally, the track record of passing things down to the lower tier has been fairly poor, taking things as a whole. That is one of the issues that lies behind localism. We need to get that straight.

What the noble Lord, Lord Lucas, suggested was a sort of localism-light in the sense of trying to avoid a bureaucratic and procedurally-driven process. On the whole I would welcome that as well. At Second Reading, I said that these things have to be rendered down to a localism scale—a community scale, not based on the sort of procedures and checks and balances that perhaps apply to the much more senior aspects that must be rightly dealt with by principal authorities.

I give one example. In my own parish council in Shipley in West Sussex, which is one of the largest geographically but has one of the smallest populations in the whole of West Sussex, a parish councillor commented some time ago on the problem the parish council was having with verges. People were encroaching on road-side verges by extending their gardens, filling-in road-side ditches, and doing all sorts of things that might include impairing forward visibility along the road. They were planting things, and so on and so forth. The verges, in so far as they were part of the highway, would have been vested in the highway authority, which in that instance is the county council. We know that all county councils are subject to cost constraints, and certainly West Sussex where I live is no stranger to that and has introduced some commendable measures to try to square the circle, so to speak. But it cannot be in all places at all times and it cannot police those verges. Such things should be preserved in the generality of the public interest—they are assets of community value in many cases but they are often orphan pieces of land. They may historically have been part of an enclosure plan or something like that which attached them to a particular estate or riparian owner, but over time, and with the process of land registration, that link has been lost. The boundary may have been drawn to an ordnance survey boundary that was set back from the hard edge of the road, so you end up with orphan strips.

Parish and town councils in some instances—I am not saying in every instance as they may not have the facility to do it—would like to get hold of those to manage them properly and make sure, in particular, that they are not filched by neighbouring householders or have things dumped on them where nobody seems to be responsible. They may get driven over because it happens to be a convenient place to pull off for dog walking, as happens in my part of the parish. That is just one example of something that could be of benefit.

In general, I support the amendment but there is a caveat. The words,

“net additional expenditure or net reduced revenue”

is a proviso that the noble Lord wants to insert under subsection (3)(a). There is a problem with activities, services and things being passed to parish councils shorn of any resource to deal with it. That is the classic thing that we refer to in parish and town council circles as double taxation. The parish then has to raise by precept a means of funding that expenditure because the principal authority has said, “Yes, you can have this but there is no funding to go with it”. I therefore enter a caveat on that. On subsection (4), I would flag up that it might be extremely difficult to verify, knowing what little I know about local government finance, to deal with the matters that the noble Lord is trying to cover there. I well understand his reasons for putting them in, but I do not know how you would prove it. However, in general I support the direction of travel of the amendment.

--- Later in debate ---

[Lord Greaves]

Will my noble friend confirm that it will still be possible for district councils or any principal council to come to an arrangement voluntarily with their parish councils to transfer service delivery to the parish council outside the provisions of the community right to challenge?

[Lord Shutt of Greetland]

My Lords, I believe that is the case. I do not see that that should be disturbed by anything that the Bill is doing. The noble Lord talked about it the other way round, saying that sometimes district councils try to offload and the parish says, “No, we would sooner you kept doing this”. I do not see that there is any reason why that cannot be done under present arrangements. The right to challenge is a different principle. There is a risk that this amendment could catch relevant authorities in an endless and burdensome cycle of considering requests and counter-requests from different parish councils in their area that have different ideas and preferences as to how services should be run.

Finally, the amendment would risk cutting across the community right to challenge as a whole. Requests from parish councils to provide services differently, which might include the service being provided by the parish council or by another organisation, would potentially override expressions of interest from other relevant bodies. I hope that in the circumstances the noble Lord will feel able to withdraw his amendment.