Chris Williamson
Main Page: Chris Williamson (Independent - Derby North)Local Audit and Accountability Bill [Lords]
Chris Williamson Excerpts
Robert Neill
Many responsible local authorities communicate sensibly and proportionately with their constituents, and there is no reason why parish councils cannot do that too. There has been a great deal of scaremongering from some commentators and sources, some politically motivated, regarding the extent of the Bill. I am sure that my hon. Friend’s parish council has nothing to fear.
Chris Williamson
Might the current Mayor of London’s ability to get his message out and his not having to rely on a council newspaper have something to do with the fact that the Evening Standard is his chief cheerleader and ran a vituperative campaign against the previous incumbent, and might that have something to do with the previous incumbent’s inability to get his message out?
Robert Neill
Now that, like me, the hon. Gentleman has time to reflect from the Back Benches, he might consider that part of this problem was that he always fought the last battle. That one is dead and gone. The current Mayor gets his message across because he makes the right case to Londoners. I would think it a good thing if an independent newspaper supported my policies; it would be better than having to pay £1.5 million or £2 million to cook up a newspaper to support them instead. So I do not think he has advanced his case with that intervention.
For another example, the right hon. Member for Leeds Central could pop across to Greenwich from Tower Hamlets and have a look at the—taxpayer-funded, of course—Greenwich Time which has been published for several years now by the Labour-controlled council. In one recent editorial, the council leader attacked the Government’s policies of austerity for damaging the people of Greenwich. That is an interesting view which might have come straight from the pen of the shadow Chancellor—perhaps it did, for all I know—but I am not convinced that it is relevant to the role of the local authority.
Neither am I convinced that it is the role of that interesting Greenwich publication to tell me about the football fixtures or the cinema listings or to give me helpful restaurant reviews. It is the same with East End Life. These are all worthy things that a commercial local paper does, but to use the phrase of my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), it is not a sensible use of council resources. I am sure we all want leisure or weight-loss ideas, but it is not the job of these supposed newspapers—these council publications—to provide them. It is a deliberate move on to the turf of privately run, independent newspapers. I say “deliberate” because in some cases, I regret to say, local authorities do not like the competition and criticism. That is what this is about.
Moving away from Greenwich, the right hon. Member for Leeds Central could cross the river again to Newham, where The Newham Mag makes great play of the “savage cuts”—an interesting phrase that I am sure the ever-restrained mayor of Newham had nothing to do with—imposed by the Government. In one fascinating passage, it stated that some councils pulled the plug on their Christmas lights this year because of “savage cuts” in their funding from central Government. When we worked on the formula grant, my right hon. Friend the Secretary of State and I did not consider taking out local authorities’ Christmas light funding. It was a clever use of words to try to suggest that central Government were being Scrooge and making it impossible for people to have Christmas lights on their high street. The article did not mention, of course, that Newham council did not cut the publicity budget, which paid for The Newham Mag, and which even on a conservative estimate would run to about 10 sets of high street lights. Interestingly, even in otherwise legitimate advertising—about making benefit claims and where to go—every reference to cuts is prefaced with “savage” or “massive”. It is clearly politically loaded and another example of how councils are acting against the spirit of the code.
Chris Williamson
The hon. Gentleman has expressed his opposition to press releases being distributed by local authorities on behalf of the controlling group. When he was a Minister in the Department for Communities and Local Government, did his Department issue press releases on his behalf?
Robert Neill
Yes, but I did not use them to attack the policies of the Opposition in party political terms. I would not have been allowed to do so under the ministerial code, and anyway they were dealt with by civil servants. I think the hon. Gentleman is also forgetting that, in all the cases I have described, local authorities that are using publicly funded publicity instruments to protest against Government cuts are using discretionary spend that they could have directed into front-line services. That is a classic example of why the Labour party is unhappy about this issue. I regret to say that it goes well beyond the egregious case of Tower Hamlets.
If local authorities want to get information across, which I accept has to happen, they might like to do as my own council, the London borough of Bromley, does. Rather than going to the expense of running its own newspaper, it puts a four-page wrapper around one of our local papers about four times a year. Those pages set out the information very attractively. They are well designed and contain professional journalistic input, and they wrap round the free-sheet that is delivered to everyone anyway. That is a cost-effective and politically proportionate way of getting genuine information across. Also, it does not offend against the code. It is nonsense that although an independent watchdog has held Tower Hamlets to be in breach of the publicity and advertising codes, there is still no legal means of doing anything about it. The Bill will rectify that anomaly.
I say with respect to the right hon. Member for Leeds Central that it is not good enough to say that we could try a judicial review.
Chris Williamson (Derby North) (Lab)
The Government have presented us with yet another very bad Bill. Indeed, it is so bad that it is difficult to know where to start, but let me begin by saying that there is a certain irony in what we are doing today. As was pointed out by my right hon. Friend the Member for Leeds Central (Hilary Benn), the Audit Commission was established by a former Conservative Government 30 years ago, and here we are now, debating this Bill because another Conservative Government want to get rid of it.
Government Members, including the Secretary of State himself, have suggested that the exposure of the gerrymandering of Westminster city council, which was exchanging homes for votes, had nothing to do with the Audit Commission. I wonder, however, whether the regime that the Government are now proposing would have been able to unveil that appalling scandal, as the district auditor did then. It really was an absolute disgrace, and it led to a huge surcharge on the leader of the council.
The role of the Audit Commission has been both extended and reduced over the years, but I often found its interventions very helpful when I was leader of Derby city council. It was able to assess the effectiveness of local public services, thus providing us with a benchmark in relation to local authorities in other parts of the country and the services that they provided. It did so by means of the comprehensive area assessment which has been so ridiculed by the Secretary of State, and which was one of the first things to be ditched when the Government came to office.
It is probably not surprising that the Government made that decision, as it coincided with their imposition on local authorities of unprecedented cuts, which have continued year after year. The comprehensive area assessment would doubtless have highlighted the significant diminution in the quality and breadth of the services provided by local authorities that resulted directly from the Government’s cuts agenda—and a very unfair agenda it was. As we know, the cuts fell most heavily on the local authority areas in greatest need, although, perversely, some authorities in other parts of the country received an increase in Government grant. I think that, had it been allowed to continue, the comprehensive area assessment would have put the Government parties in a highly embarrassing position.
George Hollingbery
When I was a portfolio holder on Winchester city council, I had to respond to the comprehensive area assessment. One of my favourite statistics that it made me report was the number of buildings that were open to the public and the number of those buildings that were accessible to disabled people. I managed to improve the ratio in my first year in post, simply because we closed a building to the public. Do Members actually think that that constitutes a useful set of reporting targets for any normal council? If the hon. Gentleman is really so keen on the comprehensive area assessment, may I ask whether he would reinstate it if he were the relevant Minister in a Labour Government?
Chris Williamson
The hon. Gentleman makes an extreme point to illustrate his argument. No one is justifying unnecessary targets. There was perhaps an over-burdensome target culture, but surely that is not a reason to throw the baby out with the bathwater. It would be an extreme overreaction to get rid of the whole shooting match just because there were perhaps some overbearing and silly performance indicators, although there was certainly scope for improvement. As my right hon. Friend the Member for Leeds Central said, we accept that the Audit Commission is going, but what is being put in its place leaves a lot to be desired.
Government Members have said that getting rid of the Audit Commission will realise significant savings, but the truth is that most of the savings have already been achieved by axing the inspection work for which the commission was responsible. It seems that this is yet another case of double counting by the Secretary of State, as there is not much evidence to support his statement that there will be a saving. Indeed, many experts say that fees are likely to increase as a consequence of scrapping the commission. The draft Local Audit Bill ad hoc committee called for the publication of a new financial impact assessment and said that the baseline should be 2010-11, rather than 2009-10. If that were done, we might get a clearer picture of what the savings will be, if any, as a consequence of the Bill.
George Hollingbery
The hon. Gentleman is being generous in giving way. I am puzzled by the putative ideas on the savings that are being made. The Audit Commission has recently re-let 70% of the business that it did in-house to private contractors and achieved 40% savings—some £40,000 per council, I understand, although that figure may be slightly wrong. Nevertheless, there was a 40% reduction in the costs of audit. Does the hon. Gentleman not recognise that that is a real and proper saving that would not have happened if the Audit Commission were still in place?
Chris Williamson
Let me quote people who perhaps know a little more about these things than me. The draft Local Audit Bill ad hoc committee looked at the matter in detail. It
“heard conflicting evidence about whether and how much public money is likely to be saved by implementing this legislation.”
I have struggled to find anyone who thinks that the proposal is a good idea.
The Audit Commission said:
“Under a free market model, the current benefits of pooling auditors’ costs will be lost and councils in remote geographical locations”—
many of the locations represented by Government Members—
“will have to meet the economic cost of the audit. In some cases this may be significantly higher than historical fee levels.”
The Local Government Information Unit said:
“If the market concentrates further, or even stands still, this will eventually lead to higher, not lower, fees.”
The Select Committee on Communities and Local Government has pointed out that the Government’s proposals for local government
“contrast with the situation in central government, where the NAO is reducing the percentage of work that it contracts out to private firms”.
I do not understand why that double standard is being applied by the Government when it comes to local government. Cynics might say that the Government are creating yet another money-making cartel. We know that the Conservative party has form in using taxpayers’ money to enrich vested interests in the private sector. We need look no further than the privatisation of the utilities, with millions of consumers being ripped off on a quarterly basis by the big six utility companies. We could also look at railways privatisation, which has seen the railway companies fleecing the travelling public, or the deregulation of the private rented sector, where we have seen a massive hike in rents. As a consequence, the housing benefit bill has gone through the roof—some £10 billion a year is going into private landlords’ pockets. This is yet another example of the Conservative party flagrantly using taxpayers’ money to enrich vested interests in the private sector. It is a shameful abuse.
The Communities and Local Government Committee hit the nail on the head:
“Unless the Government can crack the problem of the very limited competition in the audit market in the UK, it will be open to the accusation that the abolition of the Audit Commission is not a measure to save public money but merely a mechanism to transfer public money into private hands.”
I could not put it better myself. Clearly, that is an endorsement of my suspicion about the Government’s real motive for introducing the Bill.
Robert Neill
How does the hon. Gentleman square that with the Competition Commission’s recent report into statutory audit services, which pointed out that some 90% of audits of FTSE 350 companies are dealt with by what are sometimes termed the big four, whereas they only deal with about 50% of local authority audits and mid-sized firms get the bulk of the rest?
Chris Williamson
The hon. Gentleman is a big champion of vested interests in the private sector, so I am not surprised that he tries to argue that what the Government are doing is right. It is not for me to square that. If he has an issue with what the Communities and Local Government Committee has said, I ask him to take that up with the Committee. I am quoting directly from its conclusions after it looked at the matter in some detail. Do not come to me and ask me to square that. I invite him to ask the Committee to square the evidence that it took. This is the reasoned conclusion that it reached—
Chris Williamson
Indeed. As I understand it, those were the unanimous findings of the Communities and Local Government Committee.
The Bill is misconceived in another respect. My right hon. Friend the Member for Leeds Central dealt with this eloquently. In the Bill, there is no recognition of joint working, which is essential; it was increasingly important when I was leader of Derby city council. We worked to bring other public sector agencies on side with us to get more bangs for the public sector pound that was being spent in Derby, and that is even more essential as the budget at our disposal diminishes.
Therefore, I hope—my right hon. Friend made this plea—that the Government will reflect on the matter. If, as seems likely, they proceed with the Bill, I hope they will consider how the audit process could be made more relevant and up to date, given the situation we find ourselves in and the way in which public services are delivered. It does not make sense to require each public sector body to undertake a separate audit. It would be far better to recognise the fact that local authorities and other public sector agencies are working collaboratively. It is far better to have a collective audit that recognises the reality of the way in which public services are delivered in this day and age.
George Hollingbery
I was interested in the comments by the shadow Secretary of State, because the explanatory notes to schedule 4, paragraph 1, say:
“This paragraph sets out the different ways in which a body may meet the requirement to have an auditor panel. It is intended to provide flexibility for different arrangements that can reflect local circumstances and, for example, any joint working arrangements.”
There are clearly provisions in the Bill to deal with that matter.
Chris Williamson
But not—[Interruption.]—as my right hon. Friend the Member for Leeds Central is pointing out sotto voce, where there is a national and local collaboration in that sense. That is the point. This is not a partisan matter; I hope that the Government will take that on board and make that sensible amendment so the Bill is more fit for purpose.
I want to touch on the Secretary of State’s Orwellian proposal effectively to take charge of all council communications across the country. Whatever happened to the Secretary of State’s brave new world? When he first came into office he promised the end of what he described at the time as
“the Ministerial command and control system”.
Well, if this is not a ministerial command and control system, I do not know what is. This is the party that promised us localism and that promised it would sweep away the controlling hand of central Government. What a joke!
The Secretary of State has most certainly gone back on that, and his justification for his position simply does not stand up to examination. Let me quote a couple of experts in the field. The National Union of Journalists said:
“We do not believe that this element of guidance reflects the needs of many communities, nor the practicalities of providing prompt, accurate advice and information to them. In areas where there are no, or limited local newspapers”—
that, again, will include the constituencies of many Members on the Government Benches—
“then sharing planning details, service changes and details of consultations on a quarterly basis is insufficient.”
Even coalition Members in the other place have criticised this proposal. Lord Tope said:
“All we have had from the Government is rather silly and misleading statements from the Secretary of State about ‘town hall Pravdas’.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 898.]
Baroness Eaton, who, like the Secretary of State, is a former leader of Bradford city council, said
“there is no evidence that council publications are competing unfairly with local newspapers and, by the Government’s own admission, very few councils are breaking the existing recommendations”
and,
“It is therefore regrettable that many of the proposed measures in the Bill centralise powers to the Secretary of State and allow central government to interfere with matters that should rightly be decided at a local level.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 903 and 902.]
The Conservatives claim to be the great localists. When I was on the Front Bench and said that the Labour party is the true localist party, Conservative Members scoffed, but here we have a clear example of the Conservative party being the true centralisers in this country today.
We must also consider the retrospective impact of the proposed council tax referendums. The hon. Member for Bromley and Chislehurst (Robert Neill) referred to that and suggested that somehow it was not really an issue, but I beg to differ. I genuinely think that there is a real issue, which goes a long way towards undermining city deals—a welcome innovation as they give more powers to local authorities in the major core cities around the country—although I think the Government should go further in terms of devolving powers.
Again, I could not find anybody with a good word to say about this part of the Bill. The LGA says it jeopardises growth-generating investment. The country is on its knees and we are barely back into growth, so it seems absolutely crazy to deny the opportunity of growth-generating investment now. The Chartered Institute of Public Finance and Accountancy says it will confuse local accountability. Baroness Eaton said:
“It is like revising the speed limit downwards and then fining any motorist who has not obeyed the new limit before it was introduced.”—[Official Report, House of Lords, 22 May 2013; Vol. 745, c. 903.]
The truth of the matter is that local authorities are reaching agreements with levy-imposing agencies with whom they are working in partnership. They will have made arrangements going forward and some of the fees will be increasing over time, and that could push the council tax increase above the threshold at which a referendum must be called. That could leave councils in a very difficult situation. What will happen if the referendum results in opposition to the increase being imposed? The fees will still have to be paid. It will simply mean there will be even deeper cuts over and above the unprecedented cuts that have already been imposed on local authorities.
We know that many local authorities are heading towards a situation in the very near future—in the next financial year and certainly the year after that—where it will not be possible to deliver any non-statutory services. The litter will not be removed from streets and grass verges will be growing out of control. What is going on here? This is simply unacceptable. These are services that define a decent and good society, yet they are being put in jeopardy still further by this part of the Bill.
This is a dog’s dinner of a Bill, as is clear from what has been said not only by my right hon. Friend the Member for Leeds Central and me, but all the experts on these matters. They are all saying the Government have got this wrong. I urge the Minister to take a long hard look in Committee at the provisions contained in this Bill, and to perform some serious surgery and agree to the amendments we will be putting forward to try to make a better job of what is a very poor Bill. I think it will create a very difficult situation for local authorities, end up costing more money and ill-serve the people in the local authority areas that will be affected.
John McDonnell (Hayes and Harlington) (Lab)
I want to address three issues. The first is the Bill’s failure to acknowledge the fears for probity in local government, the second is its failure to address the structural and procedural breakdown of accountability and the third is the new code of practice for council newspapers.
We usually preface such debates by explaining our background in local government, and I am trying to address these matters completely objectively and without being partisan in any way. I do so as someone who has worked on the front line of a social services department, who was the head of policy of a London borough and who then became an elected member of the Greater London council, chair of finance and deputy leader before going back to being a bureaucrat in local government as the secretary—they now call them chief execs—of the Association of London Authorities, then the cross-party body of the Association of London Government. I have done my time, I suppose, over 25 years in local government.
There are fears for accountability and probity that the Bill does not seem to acknowledge or address. I wonder whether Members have seen the report published this month by Transparency International UK. Many of us will have worked with that organisation—which monitors corruption and probity, particularly in developing countries around the world—in the context of our countries of interest. I have, particularly on Kenya and other African countries.
The organisation monitors corruption in government throughout the world—establishing league tables, as some Members will recall—raises awareness of it and advises civil society and Governments on how to combat it. I urge Members to look at the report it has published this month, entitled “Corruption in UK Local Government: The Mounting Risks”. Let me quote the executive summary and some of its recommendations, which I will want to try to insert into the Bill as we discuss it in detail.
The good thing about the report is that it says there is not much evidence of corruption—but that is because what evidence there is, is anecdotal, although part of the problem is that not a lot of research has been done. The report found that although there was no agreement on the levels of corruption in local government, there was agreement across the board about the “disturbing picture” whereby
“the conditions are present in which corruption is likely to thrive”.
The report states that those conditions are
“low levels of transparency, poor external scrutiny, networks of cronyism, reluctance or lack of resource to investigate, outsourcing of public services, significant sums of money at play and perhaps a denial that corruption is an issue at all.”
The report goes into some detail about the checks and balances for accountability and probity in local government and is critical of the previous and current Governments’ performance, which undermined some of the processes of transparency, particularly the awarding of public contracts, the overseeing of their implementation and the growing tendency to outsource provision and transfer personnel between public and private roles—the revolving door syndrome that occurs not only in central Government but has gone into local government. The report also states:
“Planning decisions remain highly discretionary and are vulnerable to corruption in several areas.”
Allegations and incidents have been recorded—not at any high level, but they exist—of bribery in local government, collusion, conflicts of interest and corruption-related fraud. Of course, we have also seen examples of electoral corruption prosecuted in Birmingham and elsewhere. The report refers to a number of changes in legislation, particularly this Bill, that undermine the climate, procedures and structures that would address corruption and protect us from it.
Let me go through some of the criticisms of this Bill and some of the other legislation introduced by the Government. Transparency International UK is concerned about the abolition of the Audit Commission, as there will not longer be a “back-stop” to provide support and work to protect against corruption. There will be
“no institution with wider powers of public audit to enable criminal investigations, which the Audit Commission used to have”.
There will be
“no institution to collect nationwide data on fraud and corruption or analyse trends”,
and:
“New external audit reports will not be adequately covered by the Freedom of Information Act”.
That point has been raised by my right hon. Friend the Member for Leeds Central (Hilary Benn). The report also states:
“Local authorities will have a reduced internal capacity to investigate fraud and corruption, due to austerity measures”.
Those concerns will build up to create a climate in which there are fears for probity. The report also states:
“The responsibility for investigating and detecting fraud and corruption is being delegated to lower-level officers”
in local government. It continues:
“Audit committees are weakened and may disappear because there is no longer a statutory requirement for an audit committee to be a full committee in its own right…External auditors appointed under the new arrangements may face incentives to avoid undertaking investigations or raising concerns about suspicions of fraud or corruption.”
The report expresses its concern that:
“There is no longer a universal code of conduct to provide clarity to members serving on different public authorities and committees…There is no longer a requirement for members to declare gifts and hospitality and no legal requirement for either a standards committee or the monitoring officer to check any register of interests on a regular basis”.
Again, that is not addressed by the Bill. The report goes on:
“There is no longer a statutory requirement for a council to have a standards committee…There is no longer any obligatory sanction for members that violate the local codes of conduct”
and there is an overreliance on party discipline as the main sanction. It states:
“Since the abolition of Standards for England, there is no longer a national investigations body for misconduct.”
As the hon. Member for Mid Dorset and North Poole (Annette Brooke) mentioned, that means that some local authorities might struggle to appoint independent people
“of the appropriate calibre and legitimacy to perform the new role”
under the self-regulatory system of panels. The report says:
“The system relies too heavily on the new offence of failing to declare a pecuniary interest”,
and, of course:
“The ability of chief executives, financial officers and monitoring officers to hold elected members to account would be compromised by proposals to abolish their statutory employment protection.”
That all leads Transparency International UK to conclude:
“The Government’s changes, without apparent consideration of the consequences for corruption, are likely to have unintended consequences. The effect of the changes has been to create a situation in which corruption could thrive.”
The report is worrying and when the Bill goes into Committee, it might be worth inviting the organisation to address the Committee or provide evidence so that these matters can be properly discussed with it and its expertise can be drawn in to our consideration of the Bill, which is about local audit, and therefore probity, and local accountability, and therefore democratic accountability.
Some of the recommendations that Transparency International UK suggests could be built into the Bill are worth examining. The first states:
“Private companies, when operating services in the public interest, should be required to comply with the Nolan Principles.”
Secondly, the organisation recommends:
“Legal employment protections should be maintained for key anti-corruption officials, including Chief Executives and Monitoring Officers”.
Thirdly, it suggests:
“It should be a statutory requirement”
in this Bill
“for a local authority to have an audit committee as a dedicated full committee, with a specific remit to oversee corruption risk assessments and corruption investigations.”
It also suggests that now that the audit will be undertaken by private firms, consideration should be given to creating an auditors’ forum on corruption to bring together the private audit firms involved in local authority audit to share information, advice and good practice on the risks they identify in the audit role.
Transparency International UK also recommends that the Government should insist that the research function undertaken by the Audit Commission should continue somewhere within Government to give a clearer picture of the prevalence and scale of corruption in UK local government.
Again, although work has been undertaken by existing structures, such as the national fraud audit that has been taking place in some specific areas, there is no overall responsibility lodged with a specific body to undertake research at a national level.
The report recommends that each local authority should have a nominated individual responsible for counter-corruption who conducts a regular corruption risk assessment and liaises closely with law enforcement authorities. I will not go through the remaining recommendations except for the final one, which states that as work now goes out to the private sector, it is critical that auditors should be allowed to assess the documents from significant private contractors that a local authority has used.
Chris Williamson
On that point, is my hon. Friend familiar with the PricewaterhouseCoopers citizens jury which showed that, when polled, the overwhelming majority of the British public favour public services being delivered by public authorities and by directly employed public servants? If services are to be externalised, the safeguards that my hon. Friend is describing would be the bare minimum that the vast majority of the British public would expect.
John McDonnell
There is a general worry about what happens after privatisation. My hon. Friend cited a number of examples—rail, energy and others. People are concerned about standards of probity and issues surrounding the exploitation of the resource. There are similar concerns in relation to local government and the use of the private sector. It is important, therefore, that we build safeguards into the Bill to reassure people. I am a great believer in direct provision by the local authority itself, but if there is to be contracting out or outsourcing, it is important that we reassure people that there is a legislative framework that provides safeguards to ensure probity and to counter corruption. Transparency International suggests that that should be built into the legislation. It is important that we listen to an organisation that has the relevant expertise.
The final recommendation deals with freedom of information, which has been raised a number of times in the debate. Transparency International recommends:
“Private companies, when operating services in the public interest, should be required to comply with the Freedom of Information Act with regards to those services.”
As a specific example, it states that
“audit reports from local authorities should be covered under the Freedom of Information Act or published directly as public documents.”
That is not a particularly challenging recommendation. It should be standard practice.
As Members consider the Bill further, I suggest that they read the Transparency International report “Corruption in UK Local Government: The Mounting Risks”, and invite the organisation to provide them with more detailed information and evidence. That might enable us to address some of the concerns that have been expressed and which we all hear from time to time in our constituencies. These may be anecdotal, but the information from Transparency International suggests that there is mounting national concern as well.
My second point is about examples in my own area. The Bill does not seem to address any of the structural or procedural concerns arising from the degradation of accountability within local government. I was hoping that the Bill would go further in ensuring full accountability and transparency in local decision making. To a certain extent I blame the previous Government for the structural problems that we now have in local government. I use my own local authority as an example. I would like to see amendments to the Bill that ensure full transparency of all decision making.
In my local authority, Hillingdon, we have a leader and cabinet system which has centralised powers in the hands of one person—the leader. The leader is able to use exclusive patronage to appoint all the other members of the cabinet, and that patronage then determines the lucrative business of the payments of himself—£65,000 a year for a part-time job, plus expenses—and of every other member of the cabinet, who receive £50,000 to £55,000 each. If any members step out of line, they are demoted. In recent weeks in my local authority, I have seen long-standing experienced senior councillors prevented even from standing again for the local authority.
Transparency International’s report expresses concern about cronyism in local government. In my local area I am witnessing the worst forms of cronyism where the leader appoints everybody, everybody is responsible to the leader, and there are financial consequences if people step out of line. In addition to that, there is nothing in the Bill about the decision-making process in relation to policy, which has also been centralised. In my local authority all decisions, no matter how minor, go through the leader’s office. If any officer loses the favour of the leader, they are out. If an officer provides unpalatable advice to the leader, that is enough for them to be shown the door. That is described among officers in Hillingdon as a reign of terror.
Whistleblowing is not an option for most. In Hillingdon, when people are asked to leave, they go under a compromise agreement, which includes a gagging order. I would like to see in the Bill an end to all compromise agreements in local government and an end to all gagging orders that are implied as part of those compromise agreements, because they prevent officers from providing independent advice or making public their concerns to all members of the council and to the general public.
I want to see the Bill also address the issue of secrecy. The cabinet system means that all major decisions in my area are made in part 2 of the cabinet agenda—that means in confidence and in secrecy. As an officer in the past, I have advised on what should be in part 2 and what should be in part 1 and in public. Decisions which I considered in the past should be made in open committee and information upon which those decisions are made are almost inevitably put in part 2 in Hillingdon—the confidential part of a cabinet meeting. I want to see a provision in the Bill which restricts the ability of members to avoid accountability by putting decision making into the secret part of cabinet agendas.
I shall give a couple of examples to show how ludicrous the practice has become. For the building of a new school in my area, a matter which I have raised in the House before, a consultant was employed to examine which site the school should be built on. It was controversial because the council wanted eventually to build on a country park—a green-belt field about which even the Mayor of London expressed his concerns. The consultant’s report on which sites were examined, all in council ownership, was put in part 2 of the cabinet agenda—the secret part. Even freedom of information requests were refused on the grounds of commercial confidentiality.
We must address in the Bill how councils are allowed to interpret commercial confidentiality in a way that avoids accountability and avoids their providing even the basic information to local members of the public and also to opposition members. Let me give another example. On the same site there was a recent archaeological find of flints. The report from the archaeologist who discovered the flints was put into part 2 of the cabinet agenda on the basis of commercial confidentiality. It might have been commercially confidential 6,000 years ago, but not now. Eventually both reports were released, but not in a timely fashion.
The problem—I say this from a non-partisan point of view—is that an opposition councillor who seeks to reveal anything that is in part 2 of a cabinet meeting is threatened with criminal sanction, so people are fearful of releasing information from part 2. We should address that matter in the Bill. We need to define more clearly what is commercial confidentiality, and what criteria can be used for putting items into the secret part 2 of the agenda for a committee or cabinet meeting. I believe that is being abused, not necessarily for corrupt reasons, but perhaps for party political advantage or because individual councillors do not want to be held to account by local communities.
The Bill refers to audit and some elements of transparency as best it can, but it does not really address accountability and scrutiny. In my borough, scrutiny is virtually non-existent. Scrutiny committees are packed with a majority of party members loyal to the leader and can therefore be controlled by patronage. Scrutiny committees might have been an excellent idea some years ago, but in many local authorities, including mine, they have proved toothless.
There are real concerns about corruption. Advice needs to be provided to local authorities on how independent investigations should take place when allegations of corruption are made, but again that is not covered in the Bill. I will cite an example I raised in the House some years ago relating to the planning incentive grant introduced under the previous Government by the then Department of the Environment. If a local authority considered its planning applications within 13 weeks, it was given an additional grant from central Government, so it was in incentive to improve efficiency. In my local authority—this was proved, and the details published, as a result of what I said in the House—dates and signatures on documents were found to have been forged in order to bring planning application decisions within the 13-week period, even though many were taken later.
Those forgeries were exposed because fortunately one of the planning applications was submitted by a police inspector. He looked at the documentation and discovered that the dates had been changed. In fact, decisions on his application had been recorded as taking place even before council officers had met him to discuss it. After an investigation, a couple of officers retired from the local authority unsanctioned. Bizarrely, the leader of the section responsible for the planning process was then promoted. There is nothing in the Bill that provides real direction for local authorities on how to deal with such matters. It is extraordinary that these things still go on, yet we turn a blind eye to it by not relating the legislation to the real world of local government.
I could cite many other examples, including Southern Cross and the neglect of the elderly in my constituency, and non-monitoring as a result of the staff cuts that have taken place. Again, elderly people suffered but no one was held responsible. There was a refurbishment programme of an old people’s home—I raised this 12 months ago—which resulted in a year-long delay for elderly people being relocated to their homes. There was laundering of money via contracts to a builder. Again, there was an internal investigation that reported to part 2 of a cabinet meeting and there were no sanctions whatsoever against any officer. I wrote to the Secretaries of States of successive Governments on all those matters to call for an inquiry, but there was no response and no action was ever taken.
I am using my local authority as one example, but there are others across the country. My point is that the Bill seems to be irrelevant to what is happening in my local authority and many others across the country. It is irrelevant to the concerns about corruption raised by Transparency International and to our concerns about good governance and accountability at the local level. I hope that there might be an opportunity to amend the Bill and expand some elements of its remit to tackle some of the concerns that I, many of my constituents and many others across the country have. I hope that the Government are not fearful of grasping this nettle. Their main priority in the Bill should not be simply to let more contracts to the private sector; it should be to improve local audit and accountability. A key element of that is probity.
Let me turn to the proposal relating to local authority publicity. The all-party group on the National Union of Journalists, of which I am secretary, has been expressing concerns about some of the ideas raised throughout the consideration of this proposal. The NUJ represents members of the local press and media as well as local government officers working on the newspapers and journals published by local authorities. It is worth remembering, whatever has been said in the knockabout between the parties, that NUJ members working in local government abide by the same code of conduct as other journalists but, as local government officers, are not allowed to put forward party political views. Indeed, they could be sanctioned legally for doing so.
It has been argued that additional statutory powers are needed to strengthen the existing code of practice. As my right hon. Friend the Member for Leeds Central said, there are existing powers for that and the Government could take action against local authorities that overstep the mark, but they have failed to do so. They have taken no legal action and there has been no judicial review whatsoever of any council newspaper. I find that surprising, given the outrage that has been expressed in this House and elsewhere.
Although many of us would like to see thriving local newspapers reporting what happens in council chambers and providing information to their local communities, in reality it is rare to find a single journalist even at full council meetings. I will circulate the information from the NUJ on just how many newspapers have gone to the wall over the past 20 years, how many jobs have gone in the industry and the impact that has had on quality journalism. The circulation of some of the papers that still exist is also very limited.
The council newspaper is therefore often the only way that local people can get some form of information on what is happening in the local authority. I have looked at this, as has the Communities and Local Government Committee and others, to see what impact council newspapers have had on the commercial viability of local newspapers, and no evidence whatsoever has been found. In some instances it is quite the reverse, with an element of synergy between the local press and the local authority in its publication of information. I am concerned that the proposed measure is unnecessary, because sanctions already exist. It will also undermine the dissemination of information by local authorities to their local communities. From the NUJ’s point of view, it could have as a consequence the loss of jobs at a local level, which we should all be concerned about.
There also needs to be some clarity. I have criticised Hillingdon council, but let me now try to defend it. It is currently seeking to ensure that the local community is properly informed on two key issues of local concern. One of them, as my right hon. Friend the Member for Leeds Central mentioned, is the expansion of Heathrow airport, in which it is up against a large corporation that is sending out large amounts of information to the local community, most of which is inaccurate. It is only the local authority that is providing a balanced analysis of what is happening. The other issue is high-speed rail. I am anxious that Hillingdon council, or any other local authority, should not be debarred from ensuring that local people are kept informed about such pertinent issues, because it is absolutely essential that they are fully aware of the consequences if they are to exercise their democratic right and decide on the actions taken by local and national Government.
I would like assurances from the Minister that the activities of local authorities to inform local residents of matters such as high-speed rail or the expansion of Heathrow airport will not be curtailed by this legislation. I agree that putting press releases out is one thing, but if the local press has declined so badly, with a limited circulation and an inability to report on many issues, a press release will be inadequate. I understand the point the hon. Member for Mid Dorset and North Poole made about other mechanisms, particularly the internet, but not all people are connected, so they rely on the local authority journal that comes through the letterbox. I agree with what she said about having pictures of local councillors on every page, which I could possibly do without.
It is important that we in no way hamper the ability of local authorities to communicate with their residents. There may be opportunities for authorities to work together with the local press. I understand the point made about newspaper wrap-arounds, which have proved effective in some areas. That can assist greatly in communicating local ideas, but it does depend on the local newspaper’s circulation. Even the free sheets do not get everywhere, unfortunately. It might be possible—I would like the Government to look into this—to enable partnerships between local authorities and the local press whereby joint publications or similar could assist in the dissemination of local information.
Chris Williamson
Many local newspapers already print the council newspaper, thereby providing an income stream and additional source of welcome revenue for those newspapers, which are often under extreme financial pressure.
John McDonnell
I hate the word “synergy” but there is a potential for synergy between the local authority and some of the independent local press and publishers to disseminate information locally. One of the ideas that has come up is about local authorities participating in independent publishing companies—DCMS considered this previously—through joint ownership of a magazine or other communication that can go out to local residents. However, some flexibility from Government and amendments to the Local Government Act 2000 and the Local Government Act 2003 may be required to enable that sort of investment by the local authority in participating in independent companies.
There are constructive ways forward on this issue. If we take away the banter, whether it is about Hammersmith, or East End Life or whatever, we may arrive at a constructive way forward whereby local authorities can communicate with their residents and we can ensure that that is not used for purposes beyond good information dissemination and can protect jobs in the local authority and the local press.
Brandon Lewis
The right hon. Gentleman keeps asking for evidence, but my hon. Friend the Member for Bromley and Chislehurst has given it to him. In addition, I suggest the right hon. Gentleman compare Leeds city council’s website with the Labour party website.
The Government are aware of the burden that placing statutory notices in newspapers can place on local authorities, and that some authorities believe there are cheaper and more effective ways of informing local people on issues that affect their lives. The Secretary of State has been clear that, in the internet age, commercial newspapers should expect, over time, less state advertising as more information is syndicated online for free. Local papers need to develop new business models to fit the 21st century, particularly as it does not make sense to cross-subsidise one industry with fees from another. However, that will take time.
The Government’s council tax referendum measure will give protection against large increases in taxes raised by levying authorities such as waste disposal, integrated transport and pension authorities. Some say that the measure is unfair. I dealt with that earlier in my speech, but let us be clear that local authorities and levying bodies can work together and have done so, both under the old Government capping procedure, and more recently through the referendum principle. Councils have long worked together to agree council tax levels. That was always the case under previous systems.
Chris Williamson
Will the Minister at least acknowledge that levying bodies could, if the referendum goes against the council tax increase, result in even bigger cuts in the local authorities affected? Surely he must accept that.
Brandon Lewis
I do not accept that. The hon. Gentleman tried to make a good argument for his point of view—he wants more councils to increase tax—but the Government believe in freezing council tax and in keeping the cost of council tax down for families. We are unlike the previous Government, under whom council tax doubled. He made the argument for letting council tax spiral yet again, but I am afraid the Government do not agree with him.
The Government have made it clear that there has been no agreement to allow excessive increases in council tax without a referendum as part of a city deal. City deals are important, but they are also subject to the referendum principles. The largest estimate for a city levy in Leeds is still well below the 2% referendum principle—it is between 0.2% and 0.9%.
The House will decide shortly whether it consents to the Government including measures in the Bill to modernise the rules governing parish polls and to increase the transparency of council meetings. At the request of the other place, we are seeking to amend the Bill to include measures on parish polls, because they need to be modernised to bring the archaic process up to date, and to ensure they provide a legitimate method for local communities to have a voice on issues that directly relate to parish matters.
The widening of the Bill’s scope creates the opportunity to tackle not only parish polls, but problems with the transparency of council meetings. Those important measures will increase local accountability, strengthen local democracy and save taxpayers money. I appreciate the co-operation of the hon. Member for Corby on the matter and how he has worked with the Government to bring the measures forward. We will doubtless have further discussions on them in Committee, but town hall doors should be open to bloggers, tweeters and those who want to film and report on meetings. We will discuss that further in a few minutes.
It is a pleasure to serve under your chairmanship, Madam Deputy Speaker—this is the first time I have spoken at the Dispatch Box with you in the Chair. I hope the House sees fit to support the Bill.
Question put and agreed to.
Bill accordingly read a Second time.
LOCAL AUDIT AND ACCOUNTABILITY BILL [LORDS] (PROGRAMME)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Local Audit and Accountability Bill [Lords]:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 21 November 2013.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Mark Lancaster.)
Question agreed to.
LOCAL AUDIT AND ACCOUNTABILITY BILL [LORDS] (MONEY)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Local Audit and Accountability Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of:
(1) any expenditure incurred by a Minister of the Crown or the Comptroller and Auditor General in consequence of the Act; and
(2) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Mark Lancaster.)
Question agreed to.
LOCAL AUDIT AND ACCOUNTABILITY BILL [LORDS] (Ways and Means)
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Local Audit and Accountability Bill [Lords], it is expedient to authorise:
(1) the charging of fees in connection with the recognition of qualifications and supervisory bodies and of periodical fees to be paid by recognised qualifying and supervisory bodies, and
(2) the payment of sums into the Consolidated Fund.—(Mark Lancaster.)
Question agreed to.