Levelling-up and Regeneration Bill

Baroness Hayman of Ullock Excerpts

Committee stage
Monday 27th February 2023 Lords Chamber

Moved by

[Baroness Hayman of Ullock]

51: After Clause 5, insert the following new Clause—
“Levelling-up consultantsWithin 120 days of this Act being passed, a Minister of the Crown must publish an estimate of how much local authorities have spent on consultants in relation to this Part.”Member's explanatory statement
This means that a Minister must publish an estimate of how much local authorities have spent on consultants in relation to Clauses 1 to 6 of the Bill.

[Baroness Hayman of Ullock (Lab)]

My Lords, I will be moving these amendments in the name of my noble friend Lady Taylor of Stevenage. The first amendment is Amendment 51, which is after Clause 5. It asks for the Minister to publish an estimate of how much local authorities have spent on consultants in relation to the first six clauses of the Bill. The reason for laying this amendment is that there has been quite a lot of discussion over the last few years about the amount of money being spent both by local and national government on consultants. We wanted to probe the Government on this and have a small discussion around this area.

Back in 2020, the Public Accounts Committee released a report which said that the Government were

“too quick to spend money on consultants to undertake work that could actually be better done by existing civil servants”

and that this was being done rather than developing and retaining in-house skills. Since then, any restriction on spending controls on consultants have been ditched by the Government, allowing Whitehall departments to potentially spend millions more on these external consultants. The limits were introduced under a previous Prime Minister, David Cameron, in 2011, requiring central authorisation if contracts lasted more than nine months or exceeded £20,000. Our concern is that the value of contracts has been rising. The limit set earlier this year was £600,000, which is a huge jump. We are very concerned about this, because government spending is being tightened in other areas of public expenditure, particularly during the cost of living crisis. If the Government are increasing this extra cost of outside consultants, how can that be justified in the current crisis? However, obviously, one thing we appreciate is that during the pandemic there was additional spending in this area that could not be avoided.

In 2022, the UK public sector awarded £2.8 billion-worth of consulting contracts, according to data from the contract analyst Tussell Ltd which was published in the Financial Times. That figure was up by 75% from 2019, so even taking into consideration rising costs during the pandemic, that is still a huge jump in spending. Does the Minister agree with the Public Accounts Committee that the Government’s way forward on this should be to retain civil servants and develop their skills, and that that is a better use of government money?

I turn to the nub of the amendment, which is the published estimate of how much local authorities have spent on consultants in relation to Clauses 1 to 6. Last week in Committee, we discussed the thorny issue of competitive funding. Our concern is that this is not the best way to fund different local authorities in their bids for levelling-up pots of money. We know that local authorities have complained about the Government’s proliferation of these competitive funding pots. Alongside this, local authorities obviously have been using more consultants. It has recently been reported that consultancy firms have raked in around £26 million from councils which are clearly cash strapped. They have lost funding from central government over the last few years, so they really do not have this money to spend. The reason they are spending it is that they are trying to prepare high-quality levelling-up funding bids, and they no longer retain much of the necessary skill set for that in house.

Considering that many of those with successful bids have lost far more in local authority funding cuts than they are going to achieve, does the Minister agree with me that the only people who seem to be turning a profit here are the consultants? We believe that the Government should change the way the funding is assessed and granted. I would be grateful if the Minister, and the wider Government, could think about how we can return skills in house—both in national government and local authorities—to stop this huge amount of cash going on external consultants.

My noble friend’s Amendment 52 relates to the practicalities of implementing a levelling-up agenda. It proposes that a Minister must publish a statement of any levelling-up directors who have been appointed and their role in implementing the levelling-up missions. We have heard for some time from the Government about the levelling-up directors and their intended appointment, but we have had very little detail or further information.

Last year, my noble friend Lord Bassam of Brighton tabled a series of Questions about the government appointment of regional levelling-up directors, asking what their remuneration, role and responsibilities would be. The creation of these posts was announced not long after the White Paper was published last spring. At that stage, it was said that they were to be paid £140,000 a year. Last December, my noble friend was told in response to his Question that at that stage, none had been appointed and that further details on what they might actually do were still being worked out. Put simply, the noble Baroness, Lady Scott, said in response to his Question:

“Further announcements will be made in due course.”

--- Later in debate ---

[Earl Howe (Con)]

My Lords, as we have heard, this group of amendments is related to consultants and the Government’s appointment of levelling-up directors. Specifically, Amendment 51, in the name of Baroness Taylor of Stevenage, would require the Government to publish an estimate of how much local authorities have spent on consultants in relation to Part 1 of the Bill. I fear that requiring local authorities to report in this way would be disproportionate and unnecessary, but let me explain why.

The new burdens doctrine, established and maintained by successive Governments, requires all Whitehall departments to justify why new duties, powers, targets and other bureaucratic burdens should be placed on local authorities, as well as how much these policies and initiatives will cost and where the money will come from to pay for them. This provision already ensures that the Government must properly consider the impact of their policies, legislation and programmes on local government and fully fund any new burdens arising.

Further, local authorities are already bound by the Local Government Transparency Code, which mandates local authorities to publish data on all expenditure over £500 in open and accessible formats. I will come back to that point in a second, but I have a great deal of sympathy with the points made by the noble Baroness about expenditure by central government on consultants.

[Baroness Hayman of Ullock (Lab)]

Will the Minister clarify something? When he says that the Government fully fund any new burdens, does that mean that the Government are reimbursing local authorities for the cost of creating their bids?

--- Later in debate ---

[Lord Berkeley (Lab)]

My Lords, can he also clarify the geographical area for which he is responsible?

[Baroness Hayman of Ullock (Lab)]

My Lords, I agree that it would be very helpful, because it is a bit confusing at the moment to know exactly what is what. I would appreciate that.

I thank the noble Lord, Lord Scriven, for his support of Amendment 51. On Amendment 52, I am not entirely sure that I agree with the appointment of directors. The point of the amendment is to get a better understanding of exactly what is happening, what the timescales are and what is expected of them, then to be able to make a proper assessment of exactly what we think about this policy of directors. It is quite difficult to have a proper position on it if you do not know what is going on and what sort of people are likely to be getting the jobs. It would be extremely helpful if the Minister could write to us around any appointments that might be in the pipeline to give us a better understanding of how it is all working and what the timescales are.

While we are on Amendment 52, the Minister said that the recruitment process was being reviewed. When he writes, it would be good to understand what that means. Has there been any process so far? Are they liaising with the sector on how recruitment might best be done and on the timescales? I know that the Minister cannot give us any further information on that today, and he may not have a lot to put in his letter, but if he could give us as much as he possibly can, so we know where we are as we move forward through the scrutiny of the Bill, it would be extremely helpful.

On Amendment 51, again I thank the Minister for agreeing to write to me with more clarification around these matters. It is extremely helpful to have that. I am pleased that he agrees with us that developing skills in-house is important and that we must not have wasteful expenditure in departments. Again, the way forward is to stop it happening and to invest more in people. I thank him for his response, and thank the noble Lord, Lord Scriven, and my noble friend Lord Berkeley, for their contributions. I beg leave to withdraw my amendment.

Amendment 51 withdrawn.

--- Later in debate ---

The only other point I want to make is about the right for the Government in Clause 24 to dissolve a CCA, and again the importance there of local people being consulted and being able to influence the outcome of a decision. Given that, this is an important set of amendments and I look forward to the noble Earl’s response.

[Baroness Hayman of Ullock (Lab)]

My Lords, I will make a few comments on my Amendment 126 before we hear the Minister’s response. I tabled this amendment because public consultation is something I feel very strongly about. I worked in consultation before I entered Parliament. The noble Lord, Lord Shipley, made some comments about standards of consultation, and it is incredibly important when we are talking about consultation that we know what we mean by that and that we are not just talking about stakeholder engagement, because they are very different things. I know that the Government do have minimum standards of consultation that they follow, so I wanted to make sure that that was properly on the record.

I want the results of the public consultation to be publicly available because consultation is not just about going out and talking to people. It is about listening to people and, having listened to them, it is about demonstrating the changes made in response to what the public have said during that consultation process. That is why, to me, this is critical. If you are to bring people on board with what you are trying to achieve, they need to genuinely believe that they have been part of the process in a constructive way. Even if you do not agree with them, it is important to explain why not and whether any further action has been taken.

Finally, I may have got this wrong, but I think the Minister said in his response to the previous debate that there were no further requirements around consultation because it is covered in Clause 46. I had a look at Clause 46 and it says:

“The Secretary of State must carry out a public consultation unless”


and there are few examples. The final one is if

“the Secretary of State considers that no further consultation is necessary.”

Again, that would concern me unless it was clearly demonstrated and transparent why that was no longer required, because we have seen publicly what has been said and what further action has been taken or not taken and the reasons surrounding that. I would be grateful if the Minister could clarify that that is the approach the Government will be taking to consultation in this area.