English Devolution and Community Empowerment Bill Debate
Full Debate: Read Full DebateBaroness Scott of Bybrook
Main Page: Baroness Scott of Bybrook (Conservative - Life peer)Department Debates - View all Baroness Scott of Bybrook's debates with the Ministry of Housing, Communities and Local Government
(1 day, 8 hours ago)
Grand CommitteeMy Lords, I am grateful to all noble Lords who have spoken on what was—
My Lords, before we were interrupted, I was just saying that we are very grateful to all noble Lords who spoke on 11 February—it was as far away as that, and we have not met since then. If noble Lords think back, it was quite a substantial debate on quite a detailed group. It exposed three central questions, which the Government must answer before the Committee can be satisfied with Schedule 29. First, is community right to buy being strengthened, or is it being quietly diluted? Secondly, will the new way of doing it be workably practical? Thirdly, are we broadening community value or are we narrowing it?
I will begin with Amendment 222A in the name of my noble friend Lord Lucas. However carefully drafted Schedule 29 is, community right to buy will not function without progressive funding, and that is simply a fact. Under previous Administrations, community right to buy was not merely a legislative gesture; it was always backed by dedicated financial support. That funding was increased year on year. It was recognised that if communities are to compete with commercial purchasers, they require practical backing and not statutory wording.
I ask the Minister directly: what funding will operate under this regime? Will there be a National Lottery partnership funding, or are communities now expected to rely entirely on their own fundraising capacity?
Schedule 29 makes significant changes to the way assets of community value are defined and protected under the existing localism framework. A number of amendments in the name of my noble friend Lady Coffey quite rightly step back and ask a more fundamental question: are we improving the system that communities rely on, or are we making it more fragile? Her amendments probe whether protections could fall away too easily, whether designated periods are being weakened and whether the balance is shifting away from communities and towards expediency. At the heart, this is about certainty for communities.
The amendments from the noble Baroness, Lady Hoey, take us to valuation and compulsory purchase. If market value is assessed in a way that takes into account speculative planning uplift, communities will often be priced out right from the very outset. Section 14A of the Land Compensation Act 1961 was designed to deal with precisely that issue. Therefore, I would like the Minister to explain why the Bill does not address this directly and whether the current drafting leaves community purchasers at a structural disadvantage.
Finally, Amendment 234B, tabled by my noble friend Lady Coffey, raises a practical but important point about maintenance. What is the point of designation if an asset can be allowed to decay beyond viability into the future? If local authorities are to hold these powers, do they also have the tools to prevent deliberate neglect?
This group of amendments reveals a consistent concern across the Committee. We support the principle of community right to buy. We introduced, funded and strengthened it. But Schedule 29 represents a significant rewriting of that framework. The Committee is entitled to clear assurances that we are not, through complexity or technical adjustment, weakening the very protections that gave the right meaning. The Government must now demonstrate three things: that the right will be properly funded, that protections are not being eroded and that the definition of community value reflects modern community life in all its cultural, environmental and sporting dimensions. If those assurances cannot be given, this House will inevitably return to these issues at a later stage. I look forward to the Minister’s response.
My Lords, I thank all noble Lords and noble Baronesses for their amendments on the community right to buy and assets of community value, which I will refer to as ACVs. I know we debated this as far back as 11 February and, if it were not for the magic of Hansard, it would be a considerable memory test as to where we got to.
I hope I can reassure noble Lords of the determination of our Government to strengthen community right to buy and make it work. I will turn first to Amendment 222A tabled by the noble Lord, Lord Lucas, on the subject of funding for the purchase of ACVs. I assure the noble Lord and the noble Baroness, Lady Scott, that we are already putting record investment into communities, supporting them to take ownership of valued local assets and ensuring that they can make effective use of the new community right-to-buy powers in the Bill. The noble Baroness rightly pointed out that if you do not do that, there is little point in having a community right to buy at all. Our Pride in Place programme is providing up to £5.8 billion over 10 years to support 284 places to regenerate and improve their communities. The Pride in Place impact fund will also provide £150 million of funding for up to 95 places to support the development of community spaces, as well as revitalising local high streets and the public realm.
The Government launched the £175 million community wealth fund in September last year as part of our commitment to put power in the hands of communities and deliver on the Pride in Place strategy. The community wealth fund is funded, as the noble Baroness indicated, through dormant assets and match funding from the National Lottery Community Fund, our delivery partner. Disadvantaged communities will receive funding pots of between £1 million and £2.5 million each over a 10-year period, building community power in the places that need it most. Local people will have a say on where the funding should be spent, be that community cooking classes, after-school clubs, improvements to the look and feel of neighbourhoods, sports facilities or many other projects that have come forward for that funding. We believe that providing funding directly to the most in-need communities and putting them in the driving seat is the right approach. Communities can use their funding on the projects that are most important to them, including protecting local assets.
I understand all that money coming in, but it is targeted to certain communities. The community right to buy was for communities across the whole country. They had the ability to ask for support to save their pubs, or village or town amenities. I worry that those not in the schemes that the Government have now set up are going to be left behind.
My Lords, very briefly, I support the noble Lord, Lord Lucas, on these matters. Our national parks are now in their 75th anniversary year. Some 10% of our land and most of our SSSIs are part of our protected habitats in national parks. National parks are key for protecting our ecosystems and adapting to climate change, and they provide untold social, health and cultural benefits to the nation. They are an extremely important part of national cultures and psyche. I support the noble Lord; we need further clarity on these matters. I absolutely support his call for the Minister to provide greater clarity and guidance on these matters between now and Report, so that we can properly examine them between now and then.
My Lords, I will speak briefly to my noble friend Lord Lucas’s opposition to the question. His intention is not to frustrate the purpose of the legislation but to probe an important constitutional question: how powers exercised by the national park authorities will intersect with those newly empowered devolved authorities. National parks occupy a distinctive position within our public framework. As devolution evolves, and as mayoral and combined authorities acquire broader strategic competences, clarity of responsibility becomes ever more important.
We would therefore welcome the Minister’s reassurance on two points. First, how do the Government envisage disputes of competence being resolved where priorities differ between the national park authorities and devolved bodies? Secondly, how will the statutory purposes of national parks be safeguarded within the new governance structures? This is not a question of resi1sting devolution but of ensuring that, in our enthusiasm to devolve, we do not dilute clear lines of accountability or the protection afforded to some of our most precious national landscapes.
This are sensible probing clause stand part Questions, and we are most grateful to my noble friend for raising them today. I look forward to the Minister’s response.
My Lords, I thank the noble Lord, Lord Lucas, for opposing Clause 73 and Schedule 30 standing part in order to encourage a debate on the role of national park authorities in the production of spatial development strategies. We have discussed this issue during the passage of both this Bill and the Planning and Infrastructure Bill, and I know it is a matter of great interest to him.
As they are not strategic planning authorities, the legal duty to prepare a spatial development strategy does not apply to national park authorities. That means that they cannot be constituent members of a strategic planning board either. They remain local planning authorities with responsibility for preparing a local plan. Although national park authorities are not formally part of spatial development strategy governance, we still expect them to play an active role in preparing the strategy. This could be as a non-constituent member of a strategic authority or as a co-opted member of a strategic planning board.
Strategic planning authorities will be under a legal duty to consult any local planning authorities within or adjoining the strategic development area and affected by the strategic development strategy, including national park authorities, on their draft spatial development strategy. Planning inspectors examining a spatial development strategy will want to make sure that any views expressed by consultees have been properly taken into consideration.
During a previous Committee debate, I confirmed that the Government intend to publish guidance to support strategic planning authorities in engaging effectively with national park authorities on their strategic development strategies. I reassure the noble Lord that the Government still intend to publish guidance on this matter alongside other guidance to support the implementation of the new strategic planning system.
To respond to the noble Baroness, Lady Scott, that guidance will set out how protections are in place for the statutory purposes of national parks, how that can be conveyed as part of the strategic planning process and how park authorities can contribute to the development of strategic plans in that way, and it is the same with the competencies.
With this confirmation, I hope that the noble Lord will be able to withdraw his opposition to the clause standing part.
I did ask about this: if there is a disagreement between the national park authority and the mayor, who takes precedence?
When it comes to drawing up a strategic development strategy, it will be for the planning inspector—as they would, in the normal way, if there were a dispute between two of the parties engaged in that process—to work through that and determine whose view holds sway in the strategy.
Lord Pack (LD)
My Lords, I have one amendment on its own in splendid isolation in this group. It is, as I hope noble Lords will agree, on an important topic: the use of social media in local government. This is an important topic for several reasons. One is that social media is so central to how local government and mayors may or may not choose to communicate with residents. It is also a crucial part of how elected public officials, whether they are councillors or mayors or, indeed, at the national level, experience politics. Often, that is an unhappy experience in terms of harassment and threats, but it can also be a very positive experience in terms of being able to engage more effectively with members of the public.
Of course, social media is important in many respects for its wider impact on society. That is why it comes up so often in debates and Questions on other topics in our House. In that respect, local authorities and local government in general have an important leadership role in setting some of the practical realities of how the social media landscape plays out. Sometimes, we are all collectively a bit too passive in assuming that the social media landscape is set by a combination of tech bros in California and Ofcom getting to grips with the Online Safety Act, but there is a practical degree of leadership at all levels of government that can encourage and help bring out the best of social media while downplaying the worst of social media.
There is an important role at local government level, in particular, because local government is the original source of information on so many topics that people love discussing, debating and sharing information about, whether it is which days you should put your bins out or which days schools are being closed due to snow in the winter or often controversial issues regarding, say, planning applications. Local government can make decisions on how and where to share information on all those things. Even if, in a sense, people think that they are not making those decisions but are simply following by default the social media channels that they have always used or that other parts of government use, that in itself is a decision.
The intention behind my amendment is absolutely to respect the discretion and flexibility that there should be—different places will wish to make different decisions, as appropriate—but also to show that there are two benefits to giving an explicit strategy a bit of a nudge. One is making sure that people are thinking through these issues sensibly and appropriately, and the other is enabling democratic accountability for the decisions that are being taken. Many of us probably have a wide range of views on how appropriate or not it is for people at any level of government to use Elon Musk’s social media channels, but, crucially, for the democratic accountability element to play out effectively, it is important to know what decisions are being made, how they are being made and what the rationale for them is. Different voters in different places may come to different decisions about which approach they prefer, but having a social media strategy that is explicitly published will make that democratic process much more effective.
Of course, I appreciate that if the Minister were to kindly accept my amendment, all the issues that it mentions, such as disinformation and public trust, would not suddenly be solved by it. On the other hand, they are difficult issues that we need to try to tackle, using all the different levers available to us. In that sense, I hope that the amendment would be a small contribution to that overall challenge, and therefore I beg to move.
My Lords, we absolutely understand the intention behind this amendment. Social media clearly brings its challenges, particularly around misinformation, public confidence and data security—all serious matters. However, we do not agree that this is an appropriate statutory duty to place on local authorities.
Councils are already under immense operational and financial pressure. Their focus must be on delivering front-line services: social care, housing, waste collection, planning and public health. Requiring every authority to draft, publish and continually review a bespoke social media strategy, complete with formal risk assessments, would impose additional administrative burdens at a time when capacity is already stretched.
Local authorities should of course act responsibly and lawfully online, as they already must, but mandating a specific statutory strategy in primary legislation is neither necessary nor proportionate. For those reasons, we cannot support the amendment.
My Lords, I thank the noble Lord, Lord Pack, for Amendment 241A, which would require local authorities to prepare and publish a social media strategy. When he talked about the values of social media, it reminded me that my local authority has recently introduced food waste recycling. The bin arrived on my doorstep, and I did not know what the system was—I am not the leader of the council any more, strangely, so I did not know it was going to do it. I did not think to open the bin. Inside was a lovely set of bags that you put your food waste in and a little bag you put on your worktop. I managed to get all that from the website before I actually opened the bin and found all the relevant information. As we know, not all social media is as helpful as that.
Although I have no doubt that the noble Lord’s amendment is well intentioned, we believe it is unnecessary, given the existing legislative requirements that all local authorities must have regard to when using social media. All local authorities are already required by legislation to consider the Code of Recommended Practice on Local Authority Publicity in coming to any decision on publicity, which is defined as
“any communication, in whatever form, addressed to the public at large or to a section of the public”.
That definition clearly includes any communications posted on social media. Given that the proposed amendment would, in effect, replicate aspects of the publicity code, to which every local authority must already have regard, I urge the noble Lord to withdraw his amendment.
My Lords, I will focus my remarks on the amendments standing in my name and that of my noble friend Lord Jamieson, which concern the proposed local audit office. Having read the statement of intent and the consultation on local audit reform, we recognise that the Government have identified three systematic challenges. Two are particularly pertinent. First, on capacity, there is a severe shortage of auditors and too few firms in the market. Secondly, on complexity, financial reporting and audit requirements are overly complex and difficult to deliver on time. They are modelled largely on corporate auditing, rather than tailored to local public bodies. That encourages risk aversion and delay.
We do not dispute that there are real problems, but we want clarity over the proposed solutions in this Bill and in the transition plan published last November. Our opposition to Clause 74 standing part is not an attempt to frustrate reform; it is a probing step to understand the necessity and design of the proposed local audit office. What specific problem does a new statutory body solve that reform of the existing framework could not?
Regarding capacity, how does establishing a local audit office increase the number of qualified auditors in the system? Will it expand the training pipeline and make local audit more financially viable or attract firms that have previously exited the market? The Bill provides that the office will determine audit fees, while audit firms must nominate a lead partner for each audit. On what basis will the fees be set, and will local authorities and firms have any input at all? If fees remain inadequate, capacity constraints may persist.
There is also the question of delivery. If public provision is intended to sit alongside private provision, what scale of direct audit activity is envisaged for the new body? If it begins conducting audits itself, what impact would this have on competition and the long-term health of the market?
We are also told that the local audit office will reduce the audit backlog and strengthen relationships between local bodies and their auditors. Will this be achieved through simplification of reporting requirements, reform of risk and liability expectations and the adjustment of fee structures, or simply through centralised oversight? We need solutions to underline market weaknesses, not just structural governance reform.
The proposed local audit office will have regulatory functions, including maintaining a register of firms qualified to conduct local audits. Amendment 244 probes why a register is proposed while the office is also able to designate another organisation as an external registration body responsible for holding such a register. How many more bodies do we need in this landscape? At the same time, it may have operational functions. How will a clear separation between those regulating and operational roles be maintained? What safeguards will prevent conflicts of interest if both bodies regulate and potentially participate in the market?
That concern lies behind Amendment 246, which is explicitly a probing amendment. It seeks to clarify why the local audit office should be given the powers to acquire interest in audit firms or to provide assistance to them. What is the rationale for allowing the regulator to act as a market participant? Under what circumstances would it exercise those powers? Would it provide financial support to prevent market exit? What principles would guide such decisions?
Amendment 247 seeks assurance that the local audit office undertakes local authority audits itself and that its works will be subject to the same standard, scrutiny and independent oversight as private firms. Therefore, will the local audit office be subject to equivalent inspections and ethical standards when acting as an auditor? We would quite like a yes or no on that point.
Finally, Amendment 248 probes how rotations of key audit partners will work in practice and how independence will be safeguarded. If the local audit office undertakes audits directly, what arrangements will ensure appropriate rotation of the individuals acting as the key audit partner? What rotation period is envisaged? What process will govern handover and continuity? What safeguards will be put in place to prevent overfamiliarity and to protect professional scepticism? Just as importantly, where will these requirements sit? Will they be set out in the legislation, in regulation or through reference to an external ethical or professional standard? If an existing framework will apply, which one, and how will compliance be ensured in practice? The principle of rotation matters for independence but requirements that are too rigid risk worsening capacity in an already stretched system. How will the Government therefore balance independence with operational resilience?
These are not wrecking amendments. They are intended to provide clarity to the Committee. I look forward to the Minister’s response.
My Lords, I thank the noble Lord, Lord Shipley, for his amendments and the noble Baroness, Lady Thornhill, for speaking to them, and the noble Baroness, Lady Scott.
I will start with the clause stand part notice for Clause 74 from the noble Baroness, Lady Scott, which questions why a local audit office is required at all. The local audit office is critical to overhauling the local audit system. The Kingman review, Redmond review and Public Accounts Committee all recommended a new independent oversight organisation to simplify the system and drive change. The current model of dispersed functions across different organisations has not delivered for the system, local bodies, taxpayers or government. As someone who was involved for many years with the LGA resources board and as a spokesperson for finance in Hertfordshire County Council, I felt sometimes as though I were watching this audit problem occurring like a car crash happening in slow motion—you could see it coming along.
While audit can seem like the dry and dusty aspect of local government, it is of course, as both noble Baronesses have said, absolutely vital to ensuring that members, officers and the public can have confidence in their local authority’s financial systems. That is why when we came into government I was so determined that we would fix this. The noble Baroness, Lady Thornhill, has set out some of the reasons why this is even more vital and urgent now, as we enter the new era of devolution. The local audit office will play a crucial role in ensuring that the reforms are effectively implemented to provide better value for taxpayers.
The missing data and the backlog of unaudited accounts have led to the disclaimed opinion on the whole of government accounts for the past two years, providing no assurance to Parliament and a general loss of public accountability and trust. That is just not acceptable and we cannot carry on like that. Significant steps already taken by this Government mean that the backlog has been cleared and assurance is being built back. However, without the establishment of the local audit office and our wider reforms to tackle the root causes, the situation could recur.
To reassure the noble Baroness, Lady Scott, I will come to some of her other questions as we go through, but the local audit office will support and enable our wider audit strategy, which tackles capacity and capability issues among auditors and account preparers, as well as overly complex financial reporting and audit requirements. Without the establishment of this office and the wider reforms to tackle the root causes of these problems, we could end up back where we were a couple of years ago. The local audit office will be pivotal in rebuilding that transparency, accountability and public trust in local government and will restore a crucial part of the early warning system for local authorities to which the noble Baroness, Lady Thornhill, referred.
Amendment 243 would give the local audit office an additional function to investigate risk management issues identified by audit committees within local authorities. These committees play a vital role across all local authorities. That is precisely why this Bill requires every local authority to establish an audit committee and ensure that it includes at least one independent member to provide robust scrutiny.
If audit committees identify risk management issues within a body, they should ensure that appropriate measures are in place to address them effectively, escalating serious issues to full council where necessary. The statutory guidance for audit committees that this Bill will enable is the appropriate mechanism to consider such issues. While the local audit office will have an important role in overseeing the local audit system, the statutory audit committee framework will remain with the Secretary of State, who is responsible for the overall integrity and effectiveness of local government and, crucially, is directly accountable to Parliament. For these reasons, it would not be appropriate for the local audit office to have statutory responsibility for investigating risk management issues identified by audit committees.
Amendment 244 seeks to remove the statutory requirement for a register of local auditors to be held. The local audit register is a proven and effective regulatory mechanism for audit providers that has been in place since the Local Audit and Accountability Act 2014. Currently, the register is held by the Institute of Chartered Accountants in England and Wales, overseen in this role by the Financial Reporting Council. Audit providers that join the register agree to its rules and fund its regulatory activity through their fees. In the short to medium term, we expect the local audit office to continue the current model under which a professional accountancy body is recognised to register and oversee audit firms.
New Section 6A replicates that arrangement for the new system, with two changes. First, the register-holding body will be overseen by the local audit office, not the Financial Reporting Council, meaning that the local audit office will have the final say on enforcement where serious quality or professional conduct issues occur. Secondly, there is provision for the local audit office to hold a register itself, and regulate audit providers directly, in case this becomes a more suitable mechanism at a later stage. In the unlikely event that a register-holding body became unwilling or unable to continue in its function, this provision would also enable the LAO to step in at pace to maintain regulation. This arrangement strikes a sensible balance between independent regulation of private firms and the local audit office providing oversight and taking the final enforcement decision in the rare cases where serious infringements of quality or professional conduct occur.
Amendment 245 would remove the provision enabling the body responsible for maintaining the register of authorised local audit providers to charge a fee to applicants and registrants. The register will be both a statutory requirement and a critical regulatory mechanism, supported through a range of activities that need to be properly funded. It is right that the cost of maintaining the register should be borne by those applying and registered to receive public funding for undertaking local audit work, not through the public purse. It is also unreasonable to expect an external body to assume responsibility for the registration and regulation of the local audit market without a clear mandate to charge for the range of activities required to do so. While it would be possible for the local audit office to rely on more generic fee-charging provisions elsewhere in the Bill, it is more suitable for the register to be set up and maintained by an external registration body. Registration costs covered through fees is current practice, and continuing this is the most appropriate approach, at least in the short to medium term.
My Lords, this is not the first time I have found myself getting in the way of the last part of a Bill, usually in talking about territorial extent. The last train that would get me to Saltaire tonight leaves King’s Cross just after 7 pm, so I will try my best to be brief.
This is about terminology but also about honesty. My amendments would provide some tighter definitions of “local”, “community” and “neighbourhood”. Having seen the amendment that the noble Lord, Lord Jamieson, tabled on “parish”, perhaps I should have also included one on that. I note that his definition of a parish council includes anything that may have the same population as Greenland. The intended ideal size for a “local authority”, which this takes us to, is about the same as the population of Luxembourg. That is not really local government and it certainly is not local democracy.
I grew up believing that all politics is local, and that citizen engagement is a fundamental part of what politics should be about. This would take politics away from the local community and neighbourhood representative model, with references to community groups that are not representative but are entirely self-formed from civil society. I would not only regret that but think it a deep step back away from the principle of democratic self-government.
I know from my early experience with the Labour Party in Manchester that there are many within Labour who regard the relationship between the party and local people as one in which Labour delivers services and the local people are supposed to be grateful for them. The Liberal approach to democracy is one in which we work with people, and we expect and encourage citizens to be engaged in local and community politics.
This is a Bill that abuses the terms “community”, “neighbourhood”, “parish” and “local”. It sets up sub-regional strategic authorities and reduces the number of local elections and councillors. If I understood the answers to the Question yesterday, it is intended that, following this legislation, the next thing will be to reduce the number of local councils and borough councils in the Greater London Authority so that we have local authorities in London that are roughly the size of Luxembourg.
I regret this; as I have sat through Committee on this Bill I have found the whole Bill deeply distasteful and weakening of our democracy—but there we are. However, I wish that the Government would at least be a little tighter in their use of these important terms than they have been, and those are the intentions of my amendments.
My Lords, I shall speak to this final group of amendments, beginning with Amendment 251 in the name of my noble friend Lord Norton of Louth, which would require the Secretary of State to review the operation of the Act after five years and to report before Parliament. This report would assess the extent to which the objectives intended to be achieved by this legislation have been achieved, and whether objectives and measures remain appropriate.
This amendment speaks to a broader concern throughout Committee on this Bill. It is simply not clear what the Government’s objectives are in the Bill, as it does not follow through on its title—as we tried clearly to explain with the purpose clause in the first group of amendments on the first day of Committee. I cannot remember how many weeks ago that was. As we have said before, the financial implications are unclear, as well as whether local authorities will have the capacity to deliver on their responsibilities. But I do not think that we should wait to find that out in five years’ time; we need, and indeed your Lordships’ House deserves, that clarity now about the finances and the geographical configuration of these new authorities.
Amendment 256 in the name of the noble Lord, Lord Pack, intends to repeal the statutory provisions, which have never been enacted. I thank the noble Lord for taking the time to do this to simplify the statute book, unless the Minister can outline reasons as to why these provisions must be kept or announces a timeline for their commencement.
Amendment 264, also in the name of the noble Lord, Lord Pack, would ensure that the provisions in this Bill will be enacted within five years of its receiving Royal Assent. Again, we must have the assurance that the Government intend to follow through on legislation agreed in this House, and to be clear on what their exact plans are for the powers contained within it.
Amendments 257 to 259 in the name of the noble Lord, Lord Wallace of Saltaire, seek to divine more clearly in law what is meant by “local”, “community” and “neighbourhood”. That has been a crucial debate throughout Committee; we need to ensure that newly reorganised authorities and local government structures are not just areas neatly drawn on a map for the ease of those in central government. We on these Benches believe that they must also reflect local people’s wishes and be in keeping with local history and traditions. However, we have to be realistic—these new authorities are also going to be responsible for delivering not just very local services, which are now delivered by the district councils or by the town and parish councils, but the big services of social care, SEND, highways and so on. This legislation must not be based on a shallow understanding of what constitutes local communities and neighbourhoods. If anything, I am not sure that the noble Lord’s proposed definition of “local” as
“an area suitable for shared government, linked by easy communication”
goes far enough. People do not think of their local communities and neighbourhoods as districts or from the top-down perspective of governance structures.