Public Bodies Bill [HL]

Lord Foulkes of Cumnock Excerpts

Tuesday 9th November 2010 Lords Chamber

[Lord Taylor of Holbeach]

My Lords, I beg to move that this Bill be read a second time.

This is an important Bill, as the Speakers List recognises, and this is an important day. I shall use this speech as an opportunity to introduce the Bill and to explain why we are bringing it forward.

The coalition Government, following manifesto commitments of both coalition parties, are committed to the creation of a more transparent and accountable system of government in the United Kingdom. As part of this process, we are committed to making substantial reforms to the public bodies landscape. These reforms are long overdue. While we recognise the excellent work done by public bodies and their staff, we equally recognise the widely held view that what is often referred to as the quango state can add unnecessary complexity to public life, diluting the proper accountability of Ministers to the electorate.

The quango state has in the past suited both government and politicians. It has never suited the British public, who expect clarity and, as taxpayers, insist, rightly, that Ministers ensure that every pound the Government spend is spent efficiently and effectively. In 2009, £38.4 billion of public money was spent by public bodies; it is our duty to ensure that this expenditure is properly focused and that all public bodies are fit for purpose.

To guide this vital reform process, the Government have conducted a review of 901 public bodies, making a coherent, cross-government assessment of whether their functions were still required, and where and how these functions could best be exercised. Technical functions and those requiring independence or the provision of impartial advice would continue to be delivered by a public body. That remains the yardstick for these reforms and will continue to be the means by which the Government assess their commitment to public bodies—technical functions, the need for independence and the provision of impartial advice.

As a result of the review process, my right honourable friend the Minister for the Cabinet Office announced in another place on 14 October that the Government proposed to abolish, merge, or substantially reform 481 bodies. The Public Bodies Bill is a crucial element of the delivery of this programme. It would create a transparent legislative framework that will allow many of these reforms to be implemented. In addition, it would clarify in statute those bodies which the Government intend should be subject to future review processes, and would create a power to enable subsequent changes. In summary, the Bill would enable the Government to deliver what the public rightly expect: a public bodies landscape which is accountable, effective, and efficient. I hope that these are principles on which noble Lords on all sides can agree.

The numbers speak for themselves. The speakers list shows why this Bill was not a Lords starter by chance. The expertise this House contains will be borne out by our debate today and by subsequent days in Committee. The Government are keen to take advantage of this expertise to scrutinise this Bill with thoroughness. This is why we cannot support the amendment in the name of the noble Lord, Lord Hunt of Kings Heath. This Bill is not overly complex or technical and does not seek to radically overhaul our constitution, in contrast to the last Bill to be subject to such an amendment in this House—only the second instance of such a procedure since 1917. On the contrary, a Committee of the whole House is precisely the venue for detailed consideration of this Bill. Many noble Lords have an interest from a variety of perspectives; we will hear many of these perspectives today. I do not see what a referral to a Select Committee would add to that process, beyond an inevitable delay to the passage of the Bill and a consequent delay to a series of reforms which, in many cases, are uncontroversial and enjoy wide cross-party and public support.

I therefore ask noble Lords to consider carefully the implications of obstructing the Bill in this way, particularly given the practical difficulties inherent in seeking to implement these reforms through primary legislation. I also remind the House that the noble Lord, Lord Hunt of Kings Heath, chaired a Labour working party on Lords procedure which criticised this House for referring the Constitutional Reform Bill to a Select Committee in 2004. He declared:

“The House has pushed at the limits of the convention that it must consider the Government’s business without unreasonable delay”.

Today, he asks noble Lords to push at those limits on this Bill which, while undoubtedly of significance, does not have the exceptional impact on this House that the Constitutional Reform Bill had. I do not need to remind noble Lords that that Bill substantially altered centuries-old constitutional arrangements and the composition and role of this House. The Public Bodies Bill would have no such effect, and there is no justification for treating it in an analogous manner.

I do not wish to imply that I am in any way dismissive of the concern of noble Lords. I have met noble Lords from all sides of the House, listened to their concerns and suggestions, and intend to continue to have an open door on this Bill during its passage through this House. I think noble Lords know me well enough to know that this is not an empty gesture. Specifically, the Government see some merit in the suggestion that an order made under the Bill could be published in draft to enable a period of consultation with interested parties. We intend to consider this further.

I have noted the report of the Constitution Committee on the Bill. I thank that committee’s members for their work on this report and assure those present that I will respond in due course and engage constructively with the committee to address its concerns. In response to their complaint that the Government have not made their case for the Bill, I ask them to consider today’s debate as the beginning of that process.

I turn to the Bill itself. It would confer on Ministers a set of order-making powers to make changes to public bodies and offices via statutory instrument, providing a coherent and efficient procedure for change across government. All the main powers in the Bill would be subject to the affirmative procedure, ensuring that Parliament is able to scrutinise the detail of all changes as they are brought forward.

I emphasise to the House that the powers in Clauses 1 to 6 are limited in their application to the bodies listed in the corresponding schedules. Similarly, Schedule 7 limits the bodies to which the powers in the Bill might apply in the future. The Government wish Parliament to have clarity about the types of change that the Bill can enable, and these mechanisms secure that clarity. It would not be possible, for example, to use the Bill to effect changes to a body not listed in Schedules 1 to 6. While it is possible to move a body from Schedule 7 to a different schedule to enable such a change, this move would itself require a distinct statutory instrument.

By way of illustration, I shall give the House a number of examples of the changes we propose to make, and why they are necessary. Clause 1 gives Ministers the power to abolish a body or office; this power is relevant where the functions of a body are no longer required, or can best be carried out elsewhere. In some cases, such as British Shipbuilders, functions have already been wound down or transferred, and an order made under the Bill would simply remove the legal entity and transfer liabilities. In other cases, this power would enable more substantive reform, such as the replacement of regional development agencies with local enterprise partnerships, providing more targeted support for economic growth.

The intention of Clause 2 is to allow groups of bodies to be merged, drawing together their assets to ensure that public functions are discharged efficiently and effectively. It is for this reason that the Government intend to merge the Pensions Ombudsman with the Pension Protection Fund Ombudsman, simplifying current arrangements under which the two bodies, which already provide a coherent service, exist as separate statutory entities.

Clauses 3 and 4 give Ministers the power to modify respectively the constitutional and funding arrangements for bodies. For example, the Government intend to improve the accountability of the Equality and Human Rights Commission to Ministers and Parliament by requiring it to lay its annual business plan before Parliament, and to emphasise the importance of effective internal governance by placing the EHRC’s Audit and Risk Committee on a statutory footing.

Clause 5 allows for a body’s functions to be modified, and for the transfer of functions to an eligible person. In the case of the Horserace Betting Levy Board, the Government plan to remove the Secretary of State’s role in relation to the annual levy determination, reducing the Government’s involvement with horserace funding by devolving greater responsibility to the parties concerned.

The final principal power is to authorise delegation. The Government envisage that this power would be used to give bodies the flexibility to improve efficiency by delivering some functions through a third party—for example, empowering citizens by delegating some functions to local groups.

These powers provide a targeted framework for the reform of public bodies in the UK, centred on principles of accountability, efficiency and effectiveness.

[Lord Foulkes of Cumnock]

My Lords, will the Minister clarify the position in relation to United Kingdom bodies like the Forestry Commission or the Security Industry Authority should the Scottish Government disagree with the United Kingdom Government? How would the matter be resolved?

[Lord Taylor of Holbeach]

There has been a dialogue with the devolved authorities throughout the course of the Bill. This is a continuing process. There is a separate chapter on the Forestry Commission; I will speak to that shortly. It is a matter of debate. There is no division of view between the United Kingdom and the devolved authorities on this at this stage.

[Lord Foulkes of Cumnock]

It is my understanding that the Scottish Government are of a different view from the United Kingdom Government in relation to both the Security Industry Authority and the Forestry Commission, so this is not a theoretical problem. I am asking the Minister not what discussions have taken place but, when there is a dispute, how it is to be resolved. It is not clear from the Bill how any resolution can take place.

[Lord Taylor of Holbeach]

The Bill has proceeded on consensus. I do not imagine that it will deviate from that course in the future.

To continue, the remainder of the Bill provides for several supplementary and associated functions. Clauses 13 to 16 would give Welsh Ministers specific powers to reform environmental bodies in Wales. These powers have been requested by the Welsh Assembly Government to enable changes following their current review of environmental regulation.

Clauses 17 to 19 concern forestry. The Government are exploring a new approach to the ownership and management of woodlands and forests, with a reduced role for the state and a bigger role for individuals, businesses, civil society organisations and local authorities. I assure the House that this Government will not compromise the protection of our most valuable and biodiverse forests, including our historic woodland. Measures will remain to preserve and enhance the vital public benefits that our forests provide. The Government will consult widely on their future plans and invite views from a wide variety of stakeholders.

Clauses 20 to 22 place specific restrictions on the use of the powers in the Bill. These clauses complement the additional protection in Clause 8, which prevents a Minister making an order that he or she considers will infringe an individual’s rights. Clauses 23 to 25 confer powers to create transfer schemes and provision about taxation in relation to the powers in the Bill. Finally, Clause 26 amends the Superannuation Act 1972, clarifying rights of participation in the Civil Service pension scheme for employees of some public bodies.

I know that Members of this House will wish to scrutinise the Bill thoroughly, with regard both to its structure and its implications for specific bodies. I recognise that there are understandable concerns among staff who work for bodies where reform is proposed. I assure the House that the Government are committed to doing all we can to make changes in a manner that is fair and consistent. I also reassure the House that the fact that a body is named in Schedule 7 to the Bill should not be misconstrued as constituting an intent to abolish or otherwise reform. It simply indicates that the body concerned was within the scope of this year’s review and may be within the scope of future review programmes reported to Parliament.

I would agree with noble Lords that many bodies named in Schedule 7 perform crucial public functions with which the Government have no wish to interfere. For example, we will not do anything to undermine the vital organisational and editorial independence of Channel 4, one of the country’s most highly valued broadcasters. However, as a public corporation with statutory functions, it is right that it should be listed alongside other bodies that have undergone the recent review process. There are certain functions that the Government intend should remain outside the scope of future reviews and the powers in the Bill. These include the economic and network regulatory functions of bodies such as Ofcom, Ofwat and Ofgem, where the Government wish to ensure that regulatory stability is maintained and the cost of capital is not adversely affected.

I look forward to the debates on this Bill and to the wide-ranging expertise which noble Lords will bring to these discussions. I have committed to consider the concerns of colleagues about any aspect of the Bill, and I say again that this is a sincerely held commitment. But in making this commitment, I ask noble Lords again to reflect on the vital and sensible purpose of the Bill. As my right honourable friend the Minister for the Cabinet Office stated in a Written Statement in another place on 14 October:

“The landscape for public bodies needs radical reform to increase transparency and accountability, to cut out duplication of activity, and to discontinue activities which are simply no longer needed”.—[Official Report, Commons, 14/10/10; col. WS 27.]

All the main parties have acknowledged that this is a necessary task and the Public Bodies Bill is an essential part of this process. By creating a framework to make changes to a broad range of bodies, the Bill before this House represents a real opportunity to make lasting reforms to the business of government, and I commend it to the House.