Local Audit and Accountability Bill [HL]

Debate between Lord Wills and Lord Tope

Wednesday 24th July 2013 Lords Chamber

[Lord Wills]

My Lords, this amendment is designed to bring greater transparency to the relationships between local authorities and the private contractors to whom increasingly large amounts of public services are being contracted out. Billions of pounds are at stake in these contracts and the recent revelations about the electronic tagging work carried out by private sector firms for the Ministry of Justice are just the latest example for the case for greater transparency in these arrangements.

I moved a similar amendment at both Committee and Report, when I set out the merits of greater transparency in tackling fraud and corruption, incompetence and inefficiency and in terms of citizens’ rights to know about the services provided to them and the taxpayers’ right to know about the services they pay for. I do not need to detain your Lordships today by rehearsing those arguments again at length.

The Government appear to believe that there are already sufficient provisions for transparency for this amendment not to be necessary, but the fact that local authorities themselves are covered by the Freedom of Information Act does not always provide the necessary transparency for private sector bodies carrying out public sector work, as I argued at Committee and Report, nor does the right of electors to inspect accounts and audit documents, important though that right is and has been for the many years.

At the heart of the Government’s resistance appears to be a belief that transparency increases cost. I addressed this argument at length on Report, by analysing the Government’s figures, which suggest that such costs are likely to amount, if at all, to an increase in a tiny percentage of the sums involved. The Government have not, so far, questioned my calculations. I also pointed out that transparency can save money often by revealing fraud and corruption, incompetence and inefficiency. However, I recognise that Ministers fret about things which sometimes they do not always need to fret about and, in an attempt to set their minds at ease, I have made two changes that I hope will go some way towards meeting the Government’s concerns.

First, in this amendment, there is a provision for a review after five years to see whether the Government’s concerns about costs among other things are justified. Secondly, I have inserted “significant” into the amendment to make it clear that it is not intended to cover the provision of services by small businesses, nor the work of town and parish councils, as in those cases this amendment might be unnecessarily onerous. I hope that, even at this late stage, Ministers might reconsider their position on greater transparency in this area and that these changes might encourage them to do so. I beg to move.

[Lord Tope]

My Lords, Liberal Democrats campaigned hard for freedom of information long before the Act was passed and have since been consistent and enthusiastic supporters of its provisions. It follows therefore that we start with considerable sympathy for the issue that the noble Lord, Lord Wills, is pursuing. This is the first time I have spoken on his amendments and I am grateful to him for pursuing the issue at all stages of the Bill.

It is timely because we are now seeing in local government a significant and substantial change towards commissioning. It is not quite the same as outsourcing, as has been referred to, but it is largely brought about by budget pressures and is a change that is coming anyway. Now and in the years to come we will see local authorities all over the country of all political persuasions increasingly commissioning services not just from commercial contractors, but from the third sector, joint ventures, charities and so on. I am pleased that the noble Lord has therefore included in subsection (4) of his proposed new clause a reference to,

“joint ventures, not-for-profit organisations”,

and so on, because that is at least in part the direction in which we are heading. For all those reasons, I am pleased that we have the opportunity to debate his amendment. I am also pleased that he included “significant” for reasons that he explained. I assume it will mean that all the smaller sub-contractors, for instance, will not necessarily be covered by this, and that is welcome too.