John Redwood
Main Page: John Redwood (Conservative - Wokingham)Local Audit and Accountability Bill [Lords]
John Redwood Excerpts
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
I beg to move, That the Bill be now read a Second time.
This Bill is a natural progression of the coalition Government’s programme for reform. It decentralises power away from quangos to local people, it saves taxpayers money by cutting waste and red tape, and it replaces top-down inspection with local accountability and transparency.
The Bill will do three things. First, it will abolish the residual Audit Commission. We have already abolished its interfering and ineffective inspection regimes, such as comprehensive area assessment. We have successfully outsourced its local audit contracts, building on the fact that a lot was already outsourced. This Bill provides for the primary legislation to finish the job. There is an obvious question to ask at the outset: if companies and charities can choose their own auditors, why should councils be any different?
The Audit Commission was born of good intentions, but in a different age. Local government has changed since the 1980s, in part due to the reforming legislation of that decade which helped stamp out corruption and jobs for the boys, but by the end of the century the Audit Commission was no longer the protector of the public purse under the new regime. It had become a top-down regulator of local government, micro-managing local services and imposing excessive and questionable red tape.
The Audit Commission was a creature of the centralised state, more interested in the views of “central Government stakeholders”—to use a dreadful phrase—than of local taxpayers. For example, it failed to act on the real problems of dysfunctional administration in Doncaster. It praised Corby council for its financial controls, missing wholly the Corby cube scandal. It was caught up in the Icelandic banking collapse, and then tried to shift the blame on to councils, while it had itself badly invested £10 million in Iceland. Meanwhile, councils, like my own in Brentwood, were marked down for having weekly rubbish collections because Millbank-based inspectors did not like them.
Research before the general election suggested that local government inspection and performance regimes added up to 40% to core council expenditure. Even the Department for Communities and Local Government’s own documents admitted that the performance management regime was “unbalanced”, with 80% focused on meeting top-down requirements.
Meanwhile, the Audit Commission itself wasted taxpayers’ money with a culture of excess. The Audit Commission hired lobbyists to stop the abolition of comprehensive area assessment, and indeed, to
“combat the activities of Eric Pickles.”
I have no idea how that ended. It splurged on corporate credit cards, including £770 for a lavish meal in an oyster bar for its board members to discuss better “corporate governance”. The commission subsequently lost the bill for its own dinner. It spent £53,000 on designer chairs for meeting rooms in 2010, with some costing as much as £900. The Audit Commission spent, in its latter time, far too much time sitting comfortably.
We have already shut down most of the Audit Commission. This Bill will close it down for good and introduce a new, localised audit regime, with estimates suggesting it could save £1.2 billion over the next 10 years —with councils saving the most. Local bodies will appoint their own auditors from an open and competitive market, with thousands more contracts up for grabs. There will be a significant opportunities for small firms to bid and expand their businesses. Local bodies will be able to choose their own auditors, join forces to appoint auditors together or establish a body to appoint auditors on their behalf. The key principle is that they can choose auditors in a way that best suits their needs.
Mr John Redwood (Wokingham) (Con)
Does the Secretary of State agree that what we want is an audit system that does not equate amounts of money with outcomes without proper testing of that? We seem to have an audit system that says, “This council spends twice as much as that council, so it must be twice as good.” We want to know what we get for the extra money.
Mr Pickles
My right hon. Friend makes a reasonable point. The audit regime is just part of the process of transparency; the publication of amounts above £500 and the right to be able to see what the council is doing increase the opportunity for the taxpayer, the voter and the local press to investigate.
Hilary Benn (Leeds Central) (Lab)
The Bill might appear to some to be rather dry—[Hon. Members: “No!”] I am relieved to hear that.
As the Secretary of State has said, the Bill principally concerns how we ensure the probity, economy, efficiency and effectiveness of the spending of billions of pounds of public money. As we have heard, it might be said that the Bill, introduced by one of the late Baroness Thatcher’s great supporters, seeks both to extend, through greater transparency in council meetings—the subject of her private Member’s Bill, as the Secretary of State has reminded us—and to overturn, through the abolition of the Audit Commission, part of her political legacy. The Audit Commission was of course set up by the noble Lord Heseltine. As he explained in his autobiography—it is important to remember this:
“I thought it wrong in principle, as the 1976 Layfield Report had said, that councils should be able to appoint their own auditors. Awkward auditors do not get reappointed.”
That was his judgment.
Lord Heseltine’s creation did have achievements to its credit, although we did not hear them from the Secretary of State. It contributed to savings in local government and it developed value-for-money comparisons. I think I am right in saying that it was the Audit Commission that appointed John Magill under section 13 of the Local Government Finance Act 1982 to investigate Shirley Porter and the homes for votes scandal in Westminster.
Mr Redwood
On the point about the value-for-money component of the audit, I and a friend of mine, John Hatch, wrote that idea up and persuaded Conservative Ministers to introduce it. It did not come from the Audit Commission.
Hilary Benn
No, the Secretary of State does not know his own Bill and he does not want to hear what his Conservative colleague, Sir Merrick Cockell, has to say about it.
Members should remember what the code says. Paragraph 15 states that local authorities should
“avoid anything likely to be perceived by readers as…being a commentary on contentious areas of public policy.”
High Speed 2 is contentious, as are hospital closures, the removal of fire engines, and whether Heathrow should expand. Is the Secretary of State really saying that there is something wrong with local councils representing the views of their residents? Sir Merrick’s conclusion is that clause 38 “sets a dangerous precedent”. I could not agree more.
The National Union of Journalists says:
“There is no evidence that extra statutory powers are required”.
The National Association of Local Councils opposes clause 38. Birmingham city council said in its response:
“we do not accept the government’s starting point.”
Exactly!
Mr Redwood
We all understand that it can be desirable for councils to run political campaigns and that it will certainly happen. Is not the point that they can do so in the usual way—by making speeches in the council chamber, talking to journalists, getting it in the local media and putting it on free websites—but not through paid-for propaganda?
Hilary Benn
Let us take the case of High Speed 2 and the concerns that have been expressed by some of the right hon. Gentleman’s colleagues about the route. Is he saying that local councils should not be able, on behalf of their residents, to express a view, to make representations and to say that they want the route to be changed? If he is not saying that, I do not see how he can support clause 38, given the advice that the LGA has taken.
Hilary Benn
No, I have been very generous in giving way.
The great localist is, in this Bill, asking to be given a great big blue pencil so that he can cross out things that he does not like.