Local Government (Transparency) (Descriptions of Information) (England) Order 2014

Lord McKenzie of Luton Excerpts

Thursday 24th July 2014 Grand Committee

I believe that I have outlined the reasons behind this order and I beg to move.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the noble Lord for his introduction of this order and begin by a declaration of interest that I have entered in the register. I am a trustee of a local charity in Luton which takes people off the street, gives them a meal, gives them some training eventually and, it is to be hoped, helps them into employment. The charity engages with the local authority. It has various contracts with it and is always looking to have further such contracts.

The noble Lord will be aware of the debate in the other place and, from that, the fact that we are not looking to oppose this order. We are very happy to sign up to it and are supportive of the issue of transparency. I shall quote from the LGA briefing on the code to put the matter in context. It states:

“Local government is already one of the most transparent parts of the public sector, publishing information to inform citizens, communities and business about local authority democracy, accountability and finances, services and performance, and activities. Local authorities already publish their data based on statutory requirements and local needs and demands, which are often determined by local intelligence and Freedom of Information requests”.

It regrets the fact that this is effectively micro- managing the process and does not enable local authorities to work out their own arrangements for transparency and informing their citizens.

The Government’s position is that they espouse the cause of localism but, wherever you look, they have actually gone in the other direction—for example, with some of the planning changes that have been made, the assault on the publicity arrangements that local authorities enter into, issues around referendums and restraints on council tax levels. We recognise, too, that there has been a lot of history around this issue, culminating in the Local Government Transparency Code 2014. Therefore, I should like to make sure that I understand precisely the import of the order before us.

Part 2.1 of the code lists the areas where publication has to be quarterly. Under Part 2.2, there is a list of information to be published annually. It includes data covering local authority land, grants to voluntary, community and social enterprise organisations, organisation charts, trade union facility time, parking revenues, controlled parking spaces, senior salaries, constitution and the pay multiple. I should like to be clear: in terms of widening the types of expenditure that the Government can require to be reported on quarterly—or certainly more frequently than annually—which of those are going to be included in that approach? Are they all going to be required to be dealt with on a quarterly basis in future? If some of them are still going to be required annually, which ones will not? I am not sure that that has been spelled out, although I may have missed it. I understand that this is a voluntary code. So far as it is going to be made mandatory, from what date is that mandation going to apply?

This approach focuses on local authority expenditure; nothing in it causes an assessment of the value of the spending that has been undertaken, its impact on the community and whether it is value for money. I shall take up just one matter: the requirement in relation to published details of trade union facilities. I am bound to say that that is a bit of a spiteful issue. There is nothing in the reporting which requires any assessment of the extent to which trade union time may have been spent validly supporting and improving health and safety in the workplace, which can have significant benefits and consequences for a local authority and its taxpayers.

Also, what has happened to the best value portfolio? This was a data series owned by the Audit Commission. We debated at some length what the future of that data set was going to be with the demise of the Audit Commission. When we left the Bill—now an Act—we did not have any clarity on that. I understand that a local authority company is going to be set up to deal with the management of the ongoing contracts, but I have not seen mention of what is going to happen to those best value portfolios. Perhaps the Minister can let us know.

The code has been around for a little while in one shape or form and it has been used more or less enthusiastically by certain authorities. However, what is our experience to date of people who are accessing the data and the use to which they are putting those data? We have a concept here and one can perhaps see the thrust of that, but what is happening here in reality? Who is getting on the internet and getting these data on a regular basis? Are great hordes of the voting public engaged in this? What evidence base do we have for that? Indeed, do we have any concrete examples of how the publication of these data has actually opened up market opportunities to particular SMEs or, indeed, the voluntary sector?

What are the enforcement arrangements to be in respect of this? Is it the Information Commissioner who will have to have oversight? Does a local authority’s auditor have to take a view on this? What is it that will ensure that the quite significant effort which is to be put into this will actually be carried out in practice?

The documentation which we have indicates that the Government have accepted that this approach should be treated as a new burden. However, that acceptance came before the impact of this order, which presumably carries with it a further increase in burden if there is to be more regular reporting of some expenditure items. What precisely is planned in terms of extra resourcing, given the impact of this order?

I note that it was the LGA, I think, which raised the question of whether the expenditure we are talking about was inclusive or exclusive of VAT. Part of the Government’s response in their Q&A was that if the VAT is recoverable, it will be net of VAT, but if it is not, it will be gross of VAT. However, that is too simplistic. The noble Lord will, I am sure, be well aware from his business experience that you can have circumstances where there is partial recovery of VAT. How is that to be encompassed within these arrangements?

Can the Minister also respond to the point that the LGA makes about parking revenues and controlled parking spaces? If I may, I will read that paragraph from its briefing. It says:

“Local authorities already make a return under the single data list for civil parking enforcement, including penalties issued, penalties cancelled and the immobilisation of cars. We see little value in publishing the number of controlled parking spaces in isolation, without a geographic reference to a town centre, because this gives no indication of the relationship between supply and demand, which will usually be affected by the availability of privately-owned car parks and the price of parking there. Moreover parking charges may only apply for part of a day and the times may not be the same at every location. As the charge for parking is determined by the demand for it, requiring publication of the number of paid for parking spaces in isolation from the detailed context affecting each location will not shed light on the quality of the parking service provided or the reasonableness of the charges. It is more likely to obscure the facts than to reveal them and will impose a pointless, unfunded burden on councils”.

The LGA calls for the requirement to be removed. How does the Minister deal in detail with the thrust of the argument that it makes there?

I have one final point to make. With thresholds of £500 and so on, what is our experience to date on whether there has been particular gaming around that amount, pitching expenditure just under it or having split invoicing arrangements? Obviously it potentially lends itself to that sort of approach? I will be grateful for the Minister’s response on all this but, as I indicated earlier, we are not minded to oppose the order.

[Lord Ahmad of Wimbledon]

My Lords, first, I thank the noble Lord, Lord McKenzie, for his broad support for what the Government are seeking to do. Although I totally accept that it is important that we debate the detail, I think that all Members of your Lordships’ House believe that increased transparency at local authority level is a positive thing. That is certainly the intention behind the order.

Perhaps I may pick up on a few of the themes and some of the specific questions. First, I make it clear that the department is working very closely with the LGA and local e-government standards bodies to prepare advice for local authorities on how to meet their obligations under the code. In this regard, as the noble Lord may know, we have already published a “frequently asked questions” document alongside the code, which provides answers to questions raised. Moreover, my department is also working with the Information Commissioner’s Office to ensure that the model publications scheme definition document and guidance are also aligned, as far as possible, with the code.

--- Later in debate ---

The noble Lord asked specific questions about the best value portfolio and, if I may, I shall write to him in that regard.

[Lord McKenzie of Luton]

In relation to centralisation, my point was not against transparency but about a centrally prescribed form of transparency. There is a view that there should be a requirement for transparency but also a degree of flexibility as to how local authorities go about it. It is the centralisation which runs contrary to the position that the Minister was taking. I understand what the Minister said about Redbridge and data sharing. It is still quite difficult to get an understanding of the extent of the volume of individual voters out there who are making use of those and the use to which they are putting them. It might be somebody sitting at home after the football, switching on the computer and having a trawl through it. I am trying to get a better sense of how this is being used, in particular—I do not think the noble Lord addressed this issue—the circumstances where this is actually going to help somebody get more business, in the private sector or in the voluntary sector.

My point about new burdens was on the proposition, or supposition, that the order would involve more reporting more frequently. From what I understood the noble Lord to say, at the end of the day this is an enabling order; nothing is going to flow from it directly at the moment. Obviously, if that is the case then it could not generate a new burden. Is it right that this is just bringing forward an opportunity for a Government at some stage in the future to change the code so that some of those things published annually at the moment could be made to be published more frequently or, presumably, to enable those things that do not have to be published at all under the code to be published? It would be quite helpful to have something specific on that to make sure that we have understood it.

[Lord Ahmad of Wimbledon]

As ever when the noble Lord and I—I was about to use the term “trading blows” but I never trade blows with the noble Lord—have our cordial exchanges across the Floor, be it in the Moses Room or the Chamber, one thing I am always guaranteed is a number of questions from him. I hope the noble Lord appreciates, as I am sure he does, that where possible I try and provide a rapid response service. He raised a number of other questions but I come back to the question about the quarterly data. As I said, during the recent consultation the Government made absolutely clear their intention to regulate and to require the quarterly publication of certain information. These quarterly data are about spending and the contracts they sign. Specifically on the contracts information, having greater transparency would impact and increase competitiveness. Therefore, certain parts of this certainly would require quarterly reporting. As I said in my opening remarks, some actually requested that this be done on a monthly basis.

The noble Lord talked about centralisation. I have served in local government, as has the noble Lord, and if we take a step back I think we would both recognise that there are occasions where, of course, every local authority rightly demands local and devolved powers. However, to set a standard there are certain requirements that central government must set in codes of conduct and codes of practice. We seek to do just that, to provide the framework in which local authorities are then required to provide greater transparency at a local level, with the key beneficiaries being local residents. I hope that I have been clear on that. Moreover, the evidence from the National Audit Office, the LGA and the Press Association shows that local authorities at times have not volunteered and published key information that residents would find useful. The Government are not seeking to coerce or impose but to provide guidance and a framework in which local authorities can report more effectively and more regularly, on a quarterly basis.

There were a number of other questions. I have already said that I would write to the noble Lord on one. He raised the issue of VAT. We have discussed the treatment of VAT with the CIPFA, based on questions that arose from authorities. Where VAT cannot be recovered, the gross amount should be published instead, otherwise the amount of VAT paid would be published, be it at partial or full rate.

The noble Lord also asked about parking spaces and reviews. He will be aware that parking restrictions and enforcement are important issues to local people. I can remember my postbag being rather full with such complaints. Not that many people wrote to me telling me how wonderful the local parking restrictions were, but one or two did and they have gone into my memory box.

I am sure that the noble Lord would agree that local people should be able to see the core data and be able to take an informed view of the authority’s decisions. We have used existing DfT definitions in drafting this code. I assure the noble Lord, and I am particular about doing so whether it be on primary legislation or orders, that we will revisit Hansard and if there are specific questions that I have not answered completely, I will write to him.

[Lord McKenzie of Luton]

I am grateful to the noble Lord. He always seeks to answer questions fully either at the Dispatch Box or subsequently. I just want to make sure that I have the issue of the impact of the order right. The code issued in May this year already has a requirement for quarterly reporting on a range of issues and annual reporting on another range of issues. In those circumstances, is the impact of the order just to say that those requirements can be mandatory, or is it an enabling measure to say that we could change the range of expenditures that have to be reported more frequently at some stage in the future?

[Lord Ahmad of Wimbledon]

One of the points the noble Lord makes is about making what was a voluntary requirement mandatory in as much as local authorities will be required to report quarterly. As I have said before, it is important to aid transparency at a local level. We need to see greater levels of transparency. We have seen good and bad examples among local authorities. The code issued in May is recommended practice until the regulations are made. This order enables the regulations that we intend to make that will require quarterly publication. The noble Lord is right to say that we are moving from a mandatory code, but these regulations will make it a requirement for the local authority to report on a quarterly basis. I hope I am clear on that.

In conclusion, I once again acknowledge the noble Lord’s broad support for the intention behind the Government’s actions, which local people and local authorities believe will bring greater transparency and benefits. Local authorities have made progress in publishing key basic data. Where it has been good, that has been widely acknowledged, but unfortunately the data have been patchy in certain areas. Greater transparency can help secure better public services, greater accountability and increased economic growth. The respondents to the Government’s recent consultation did not question the quarterly publication of expenditure and contract information. We believe ultimately that this is about ensuring that our citizens at a local level are served well and in a transparent manner. That is certainly the message behind this order and I commend it to the Committee.