Lord Pickles
Main Page: Lord Pickles (Conservative - Life peer)Local Audit and Accountability Bill [Lords]
Lord Pickles Excerpts
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
I beg to move, That the Bill be now read a Second time.
This Bill is a natural progression of the coalition Government’s programme for reform. It decentralises power away from quangos to local people, it saves taxpayers money by cutting waste and red tape, and it replaces top-down inspection with local accountability and transparency.
The Bill will do three things. First, it will abolish the residual Audit Commission. We have already abolished its interfering and ineffective inspection regimes, such as comprehensive area assessment. We have successfully outsourced its local audit contracts, building on the fact that a lot was already outsourced. This Bill provides for the primary legislation to finish the job. There is an obvious question to ask at the outset: if companies and charities can choose their own auditors, why should councils be any different?
The Audit Commission was born of good intentions, but in a different age. Local government has changed since the 1980s, in part due to the reforming legislation of that decade which helped stamp out corruption and jobs for the boys, but by the end of the century the Audit Commission was no longer the protector of the public purse under the new regime. It had become a top-down regulator of local government, micro-managing local services and imposing excessive and questionable red tape.
The Audit Commission was a creature of the centralised state, more interested in the views of “central Government stakeholders”—to use a dreadful phrase—than of local taxpayers. For example, it failed to act on the real problems of dysfunctional administration in Doncaster. It praised Corby council for its financial controls, missing wholly the Corby cube scandal. It was caught up in the Icelandic banking collapse, and then tried to shift the blame on to councils, while it had itself badly invested £10 million in Iceland. Meanwhile, councils, like my own in Brentwood, were marked down for having weekly rubbish collections because Millbank-based inspectors did not like them.
Research before the general election suggested that local government inspection and performance regimes added up to 40% to core council expenditure. Even the Department for Communities and Local Government’s own documents admitted that the performance management regime was “unbalanced”, with 80% focused on meeting top-down requirements.
Meanwhile, the Audit Commission itself wasted taxpayers’ money with a culture of excess. The Audit Commission hired lobbyists to stop the abolition of comprehensive area assessment, and indeed, to
“combat the activities of Eric Pickles.”
I have no idea how that ended. It splurged on corporate credit cards, including £770 for a lavish meal in an oyster bar for its board members to discuss better “corporate governance”. The commission subsequently lost the bill for its own dinner. It spent £53,000 on designer chairs for meeting rooms in 2010, with some costing as much as £900. The Audit Commission spent, in its latter time, far too much time sitting comfortably.
We have already shut down most of the Audit Commission. This Bill will close it down for good and introduce a new, localised audit regime, with estimates suggesting it could save £1.2 billion over the next 10 years —with councils saving the most. Local bodies will appoint their own auditors from an open and competitive market, with thousands more contracts up for grabs. There will be a significant opportunities for small firms to bid and expand their businesses. Local bodies will be able to choose their own auditors, join forces to appoint auditors together or establish a body to appoint auditors on their behalf. The key principle is that they can choose auditors in a way that best suits their needs.
Mr John Redwood (Wokingham) (Con)
Does the Secretary of State agree that what we want is an audit system that does not equate amounts of money with outcomes without proper testing of that? We seem to have an audit system that says, “This council spends twice as much as that council, so it must be twice as good.” We want to know what we get for the extra money.
Mr Pickles
My right hon. Friend makes a reasonable point. The audit regime is just part of the process of transparency; the publication of amounts above £500 and the right to be able to see what the council is doing increase the opportunity for the taxpayer, the voter and the local press to investigate.
Robert Neill (Bromley and Chislehurst) (Con)
I entirely agree with my right hon. Friend’s observation about the great opportunities we are giving to the council tax payer. Does he also agree that the perverse consequence of the previous system was that council policies were often skewed towards obtaining the result required to get approval by the Audit Commission, rather than towards the priorities that the council tax payers would have wished for?
Mr Pickles
My hon. Friend makes a reasonable point. There was a box-ticking culture, and local authorities were often spending an enormous amount of time on increasing their scoring as opposed to delivering decent services for local people.
Protection remains in place for whistleblowers and to prevent Enron-style conflicts of interest. We need to remember that the Westminster homes scandal was uncovered not by the Audit Commission, but by an outsourced auditor from Touche Ross. There is no reason why private sector auditors cannot be independent and fiercely robust. Reserve intervention powers will remain to tackle systemic failures such as those at Doncaster, working with the local government sector, but they are the exception that proves the rule. There will be a continuing role for both Members of Parliament and Ministers to use their public voice to challenge local government when bad decisions are made—that is called democracy.
The second provision in this Bill will protect the local press from unfair local competition. Where local newspapers thrive, local democracy thrives. Local newspapers not only inform residents of what is going on, but play a vital role in exposing local waste, mistakes and corruption, and, thus, in holding councils to account. When councils put out their own glossy free sheets to compete with local newspapers, local democracy is the loser. Tackling that abuse was a key pledge in not just the coalition agreement, but the general election manifestos of both parties.
In 2011, Parliament previously strengthened the local government publicity code, but a small number of councils have intentionally ignored it, with Tower Hamlets being a case in point. Ofcom has found it guilty of breaching broadcast rules for political advertising, but no power exists to tackle its political propaganda sheet, and local auditors have recently refused to intervene. Such actions are not just a misuse of public funds; they are, ultimately, harmful to local democracy and the independence of the free press. They are also further evidence of a worrying pattern of divisive community politics and mismanagement of council staff and resources by the mayoral administration. So provisions in the Bill will ensure that we will act when Parliament is ignored. Yes, this is central intervention, but it is being done to protect the free press and deal with the serious abuse of power. Even in a localist system, there is a role for central Government to set an ethical framework and maintain checks and balances on local government to prevent corruption. Without such backstops, there would be a siren voice for a return to top-down inspections or to set up a quango such as the Audit Commission.
The third and final provision in the Bill will close a legal loophole and ensure that all councils’ bills will be set so that they are fully accountable to local taxpayers. Some unelected bodies are setting a levy on council tax bills with little or no accountability for local voters—from waste disposal authorities and integrated transport authorities to crematorium boards. We will ensure that the direct democracy provisions in the Localism Act 2011 allow council tax referendums to apply also to that quango state.
The Bill has already been scrutinised in the Lords, where the Government listened to a range of views and made a number of minor amendments. Subject to the will of the House, we intend to make the Bill even stronger. We will modernise the archaic rules on parish polls, for example by allowing longer voting hours and postal votes. Perhaps our most significant proposal is to give people the right to film, blog or tweet at council meetings. Some councils would prefer meetings to be held behind closed doors, but the public has the right to see decisions being taken and how the money is spent.
A private Member’s Bill promoted by Mrs Thatcher introduced the right to attend council meetings back in 1960, and that in turn built on a law introduced by the Liberal Government of 1908, so this is truly a coalition of minds. It is right that we should now bring her legacy up to date for the digital age. We have previously amended secondary legislation to open up councils’ executive meetings and have encouraged councils to open up their full council and committees. Many have refused, however, citing health and safety, data protection or just standing orders. Tower Hamlets said that such a change would lead to “reputational damage”. Well, yes, it probably will when people see what is going on in their council chambers. There have even been cases of the police being called to threaten bloggers with arrest. We will therefore make the necessary changes to primary legislation to allow full councils and committees to be open as well.
Our argument is that the coalition Government are scrapping the top-down red tape of Whitehall inspection and micro-management. That will save taxpayers’ money and help to devolve power, but it must go hand in hand with local transparency and accountability. We must ensure an independent free press and scrutinise and challenge bad decisions by councils. Individual taxpayers and the new wave of citizen journalists must be let in to conduct their own scrutiny. We are localising audit and scrapping protection, while ensuring that there is protection against the bad old days of municipal corruption. In short, the Bill will deliver greater openness, stronger local democracy, accountability and significant savings for the taxpayer. I commend it to the House.
Hilary Benn
I accept my hon. Friend’s point. If the system is changed in the future, as long as people knew where they should look, they could trawl through council websites or other publications.
On the frequency of publication, the vast majority of councils that produce magazines publish them four times a year or less. A very small number publish more frequently, but does that constitute justification for the power in clause 38? Does it actually matter if a small parish council puts out an A4 newsletter once or even twice a month? What business is it of the Secretary of State anyway? Has he not got more pressing things to do?
The second argument we have heard is that Ministers are exercised by propaganda on the rates. The Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth (Brandon Lewis), has talked about a
“corrosive abuse of taxpayers’ money.”—[Official Report, 14 February 2013; Vol. 558, c. 840W.]
The Secretary of State has talked about pocket Pravdas, town hall Pravdas and shutting down the Pravda printing presses. Members will detect a bit of a theme there, so I thought I had better have a look. I spent a little time reading through council publications, copies of which I have with me.
Given what Ministers have said, I was expecting to find a hotbed of raw, red propaganda and party politics, but I have to say that I was sorely disappointed. There was not a single proclamation from local authority supreme Soviets, no diktats from executive board commissars and—this was especially disappointing—not a single article on the latest tractor production figures. There was nothing on collective farms. The nearest I got to that was an article about a community garden where “residents developed plots”. Is that the sort of dangerous, collectivist revolutionary activity—plotting in the garden—that keeps Ministers awake at night? Actually, the piece is from an excellent publication, South Kesteven Today—the local magazine of the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles)—and is about a community garden in Stamford.
I continued my search for the cause of all this anxiety. I had a look at Bradford’s Community Pride. The Under-Secretary of State for Communities and Local Government, the hon. Member for Keighley (Kris Hopkins), who has responsibility for housing, has left the Chamber, but the magazine had an article on deadlines for primary school applications and an explanation of council tax. Is that a problem?
I had a look at the Epping Forest magazine, Forester, which had an article about parking charges. We know how that subject gets the Secretary of State going, but it is also a very good publication. And what has Luton done? What has Luton done?
Hilary Benn
The Secretary of State obviously forgets that he criticised Luton for its publication. I have the latest edition of Luton Line. It is a very good publication. On the front page is a photograph of the former Transport Minister, the hon. Member for Lewes (Norman Baker), holding a spade and standing next to the Labour leader of the council—now that is a coalition to reckon with. They are celebrating work starting on a new relief road.
These publications contain articles about recycling, articles on health, pleas for foster parents, adverts for MPs’ surgeries, and lists of councillors. Pocket Pravdas? What a load of nonsense.
Moving from the fanciful to the serious, the LGA has taken independent legal advice on clause 38, and Sir Merrick Cockell says that it
“confirms our fears that a government could hand power to one individual in Whitehall to restrict councils from campaigning on important issues such as HS2 or hospital closures if they so wish.”
Hilary Benn
No, I have been very generous in giving way.
The great localist is, in this Bill, asking to be given a great big blue pencil so that he can cross out things that he does not like.
Hilary Benn
The right hon. Gentleman shakes his head and says that it is nonsense, but he is undone by his own words. He has obviously forgotten what he said in the response to the consultation, in which ministers justified the new powers by saying that they would
“ensure that in future effective action can be taken should any council be considering publicity that is of a political or tendentious character.”
The only way in which that can be interpreted is that the Secretary of State is seeking to take a pre-emptive power of censorship. What did he mean by that and how on earth will it work?
Last year, the Secretary of State told the Conservative party conference that
“without constant vigilance—the cigar-chomping Commies will take over.”
What none of us realised then was that the person we needed to worry about was him. Clause 38 is wrong in principle and I cannot see how it will work in practice. We will seek to remove it in Committee.
I turn now to clause 39 and the new matters that the Secretary of State wants to include in the Bill. In responding to the debate, will the Under-Secretary of State for Communities and Local Government, the hon. Member for Great Yarmouth, explain why he is reneging on the deals that his Government signed by making the provision on referendums and levying bodies retrospective?
The Secretary of State well knows that an important element of the Leeds city region deal was the establishment of a significant transport investment fund, partly funded by central Government and partly funded by the transport authority levy over 20 years. A year ago, the former cities Minister, the right hon. Member for Tunbridge Wells (Greg Clark), said that the deal was:
“Giving cities the powers, control over resources, and funding they need to fire on all cylinders”.
Will the Secretary of State explain why, almost a year after his ministerial colleague put pen to paper to sign the deal, he is asking the House to undermine it? Will he set out his assessment of the impact of his decision, and say what effect it will have on holding back investment in transport infrastructure and local growth in the city region? This is an important point of principle, because I fear that the actions of the Secretary of State in imposing the rules retrospectively and going back on a done deal will undermine confidence in the city deal process—which I support—and harm the certainty on which sound financial planning and private investment rely.
To limit the damage of his decision, will the Secretary of State clarify for the record that at the time the city deal was signed, he had no plans, and had had no discussions, about changing the rules on levying authorities? The answer to that must be no, because if he had done so he would—of course—have been honour-bound to disclose that to the people with whom he was negotiating.
Hilary Benn
I will give way so that the Secretary of State can clarify that point.
Mr Pickles
It is important to address this rather silly suggestion. From the published plans and what we know, the extra levy does not make a single percentage share difference. We know what the city deal is for Leeds—it is perhaps the most ambitious of the lot. Even assuming that we have the same referendum threshold as in the past, the proposal comes nowhere near to going over that threshold.
Hilary Benn
First, that is not the view held by the Leeds city region, and secondly, the House will have noticed that the Secretary of State did not answer the specific question I put to him about what he knew when he signed the deal.
The Secretary of State proposes to make other changes by widening the scope of the Bill, and there have been discussions about how we deal with the problem of the Leeds city region and the fact that York cannot be a full member of the combined authority because of what is known as the Selby corridor—it is not coterminous. Perhaps he will respond to that point. I am grateful for the indication I have received from Ministers that they are willing to deal with that issue—in the Bill if they can, and if not through other legislation—and it would be helpful if the Secretary of State could place that on the record.
Mr Pickles
I am happy to say that what the right hon. Gentleman wants to achieve—to ensure that authorities can work together as part of a deal, even though they are not coterminous—is eminently reasonable. Whether we achieve that through the Bill or through other mechanisms, we are happy to enter into discussions about that, and I am confident we can have a resolution before Christmas. What he seeks is wholly reasonable, wholly sensible, and we will do our best to achieve it.
Hilary Benn
I am genuinely grateful to the Secretary of State for that assurance, and I look forward to working with him to bring that change about.
On parish polls, it is clearly not sensible to allow 10 people, in some cases, to trigger a referendum in a parish that represents 10,000, 20,000 or an even larger number of people. We will therefore support that change, and also the proposal that councils in England should allow the recording and videoing of council and committee meetings. In this day and age, big changes in technology make recording and videoing readily possible, and I cannot see the difference between sitting in a meeting, listening and writing down what is being said, or—for those who have shorthand—taking a verbatim record, and making one’s own recording.
As the Secretary of State acknowledged, a new generation of bloggers is relating to politics in a different way, which we should all warmly welcome—frankly, the more people who get to hear what their local council is doing, the better. Who knows? Perhaps this House will one day follow suit and allow those watching us to keep their own records of proceedings—indeed, I may one day be tempted to record the Secretary of State from across the Dispatch Box. I have, however, a sneaking suspicion that Brass Crosby—who, as some Members will know, was committed to the Tower of London in the 1770s for daring as Lord Mayor to release a newspaper editor who had had the audacity to report what was happening in Parliament—and indeed Thomas Hansard, after whom the Official Report is named, would both thoroughly approve of that change.
In conclusion, there is a great deal for the Committee to discuss, and I know that my hon. Friend the Member for Corby (Andy Sawford) will do a sterling job leading for the Opposition and responding to the debate. We owe it to ourselves, local authorities and the people that we—and they—represent, to get the right system in place, and it is clear there is still much to do.