Local Government Bill [HL]

Lord Howarth of Newport Excerpts

Wednesday 14th July 2010 Lords Chamber

[Lord McKenzie of Luton]

My Lords, I shall speak also to Amendment 3. Before addressing the detail of these amendments, I should register our concern at having reached Committee stage without having had sight of the transcript of Mr Justice Ouseley’s pronouncement at an oral hearing on 5 July. We take it from the communication that we have received from the Minister that the effect of the pronouncement was to quash the orders with effect from 5 July, nullifying from that date the full effect of the orders and, in particular, causing the term of office to come to an end of those councillors who remained in office as a result of Article 11 of the two orders. Should our understanding be changed by eventual access to the transcript, we reserve the right to return to certain matters on Report.

However much we deprecate the current situation, we have to accept for the purposes of the Bill that the quashing of the two orders obviates the need for Clause 1(3) and that the proposals for unitary government for Exeter and Norwich, which were the subject of the orders, are brought to an end. Furthermore, Clause 1(1) will, if enacted, preclude the current proposals for Exeter, Norwich and Suffolk from being taken forward at all.

However, as we have discussed previously, the provisions of the Local Government and Public Involvement in Health Act 2007 are being left intact by the Bill, so the opportunity for the Secretary of State to invite principal authorities, including Exeter, Norwich and Suffolk, to bring forward proposals in the future for unitary status remains. Of course, we can take no encouragement from what the noble Baroness said at Second Reading about the likelihood of that happening. She stated that,

“it would also be fair to say that the Government have no plans to issue further invitations for unitary authorities and, if there were applications, they would be viewed against the serious economic situation we are in at the moment and consideration would be given to whether they offered any value for money whatever”.—[Official Report, 30/6/10; col. 1832.]

Value for the money is, therefore, at the heart of the Government’s concerns.

The impact assessment for the Bill is essentially the mirror image of the impact assessment for the original orders. We are faced with three scenarios: the status quo; the value for money arising from unitary Norwich and Exeter; and value for money from the Boundary Committee proposals. The latter two have been the subject of detailed work and independent review. I believe that the Minister now accepts that the transition period costs and savings, for example, from Norwich and Exeter unitaries were broadly equivalent and that ongoing savings could amount to £6.5 million per year.

All that we have for justifying continuing with the current arrangements is the assertion that the savings achievable through restructuring could be made by the councils working more closely with each other. We do not know whether the savings that the Government have in mind reflect the level of savings that would flow from the Boundary Committee proposals or from the Exeter and Norwich proposals. The Minister might take the opportunity to say which. No detailed figures have been presented to us; no explanation of the basis on which the Government are making this judgment has been given; no independent verification of the judgment has been done; no assessment of what history tells us about the propensity of the councils to co-operate has been made—hence our amendments.

Amendment 1 would simply extend the reference to the 2007 Act to the whole Bill, not that there will be much of it left. Amendment 3 gives us an opportunity to test the Government’s assertion around the savings that they believe are possible without restructuring. It would require an independent report to be prepared to determine whether value for money is being delivered for each authority whose unitary proposals are stopped by this legislation.

What do we mean by “value for money”? Value for money is about offering efficient, effective and joined-up public services, delivered through maximising collaboration and technology. It is about services that are effective, responsive and best suited to meet the needs and preferences of local and business communities. It is ultimately about services that people use because they value them, not because they have no alternative. Those services should reflect consideration of demand and other factors in the area, including areas of deprivation, transport links and travel to work, and shopping and leisure patterns. They should involve communities playing an active role in influencing and shaping both their planning and delivery. The coalition Government’s programme proposes to abolish the comprehensive area assessment and to cut local government inspections, so whatever performance framework will be left intact or will be introduced to see what progress any council is making is a matter of uncertainty.

In light of this, the amendment represents an extremely modest proposal. It would give the principal authorities at least two years to make progress. It does not seek to direct the Secretary of State to any course of action should the review show the status quo not to be delivering value for money. However, it would provide an opportunity for some reflection on the decisions that prevent Exeter, Norwich and Suffolk from attaining unitary status—reflection that, regrettably, the impact assessments make clear is not otherwise to be done. I beg to move.

[Lord Howarth of Newport]

My Lords, before I speak to Amendment 3, perhaps I may apologise to the House for being unable to be present for the Second Reading debate and explain that I was chairing a trustees’ meeting and the annual general meeting of a charity in Brighton. I gave my apologies to the noble Baroness, Lady Hanham, but, until now, I have not had an opportunity to explain and apologise to the House.

The independent report that Amendment 3 would require the Secretary of State to lay before Parliament would hold both Norfolk and the Department for Communities and Local Government to account in a useful and appropriate way. In the past, certainly in the case of Norwich, whenever proposals for unitary local government have been made, Norfolk has promised to work in better partnership with Norwich City Council and to achieve economies, but in practice nothing effective has been done. These have been empty words intended to fend off the threat of unitary status. If we were to have the report proposed in this amendment, it would put the county on the spot.

CLG produced its impact statement of the costs and benefits of its policy to abort unitary status for Norwich and Exeter to accompany the Bill when it was introduced. As my noble friends explained at Second Reading, that was a shabby piece of work. The Government contended in the impact statement that the scale of efficiency savings that had been forecast to be achieved through unitary status could be achieved by other means and without the disruption of reorganisation. However, the evidence basis for that assertion has not been presented. On the first page of the impact assessment, the question is asked, in the format of these assessments:

“When will the policy be reviewed to establish its impact and the extent to which the policy objectives have been achieved?”.

The Government answered, in the box opposite that question:

“It will not be reviewed”.

Then this question follows:

“Are there arrangements in place that will allow a systematic collection of monitoring information for future policy review?”.

“Not applicable”, say the Government. It is clear that they do not want the cost-effectiveness or the value-for-money implications of their policy to be analysed and reviewed in the future.

A section of the impact statement provides a checklist of specific impact tests that the Government might have applied as they prepared the policy. However, they did not take the trouble to carry out any of these specific impact tests, whether on,

“Statutory equality duties … Economic impacts … Environmental impacts … Social impacts”,

or,

“Sustainable development”.

The Government simply put “No impact” in each of the boxes opposite those tests. It therefore appears that CLG might be rather embarrassed if there were to be any systematic audit of the value for money and the administrative and economic consequences of the policy of retaining the status quo as opposed to going to unitary status.

As the document continues, it asserts:

“Stopping these unitaries … is good value for money … there is no need for forced amalgamations to achieve efficiencies of scope and scale, and the way forward is to reform and improve local government from within”.

That begs the question. How do you reform and improve local government from within? One of the options would be a post-implementation review plan, the possibility of which is contemplated in Annexe 1 to the impact statement, but the Government have declined to bring one forward. In the box that inquires of the Government’s views about,

“Success criteria … Criteria showing achievement of the policy objectives as set out in the final impact assessment”,

the Government’s answer is, “Not applicable”. Then there is the question of what “Monitoring information arrangements” are to be provided; again, “Not applicable”.

Finally, the Government are invited to answer the question in the impact statement on reasons for not planning a post-implementation review. Their answer is:

“We are not proceeding with unitary councils in Exeter and Norwich. As these unitaries have not yet been created, the proposal is in effect remaining with the status quo of two-tier authorities in Exeter and Norwich. As such it is not appropriate to evaluate it”.

That seems to me the most extraordinary and irresponsible approach to the responsibilities of government. In the impact statement, the Government have concealed and conjured figures to disguise the fact that the preservation of the status quo with the two-tier system of local government is the most expensive of the three options before the Secretary of State. The other two options were a unitary Norwich and Exeter or unitary counties of Norfolk and Devon. Both those options would have been administratively cheaper than preserving the status quo.

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[Baroness Scott of Needham Market]

Is there not a danger that, if this amendment were passed, the noble Lord would place a particular duty on these authorities that does not apply to any other authorities anywhere else in the country and that he would therefore be turning this Bill into a hybrid Bill?

[Lord Howarth of Newport]

We were at very particular pains to draft these amendments and have benefited very much from the advice of the Clerk of Public and Private Bills, who has ensured that these amendments are not hybrid—and of course I respect his opinion on that particularly important and sensitive matter. What we propose is a model for all principal authorities, for district and county councils throughout the land. I am simply illustrating the case by reference to what might occur in Norwich, Norfolk, Exeter and Devon, because those are the particular authorities that the Bill deals with.

Just as I would imagine that the Permanent Secretary as accounting officer would certainly want the kind of audit that this report would provide, so, too, I think that Parliament would. As has been extensively debated in your Lordships’ House in recent days, Parliament wants to undertake more post-legislative scrutiny. If there is to be post-legislative scrutiny, we will need the data about the performance of the policy that the legislation implements. Does the noble Baroness agree with this amendment and feel that there is a good case for improving transparency and accountability as the amendment proposes? If she does not, what are her reasons for opposing- it?

[Baroness Butler-Sloss]

My Lords, I speak to oppose these amendments. I first apologise for not attending the Second Reading debate. I was attending a session on why I should not speed, which, as it required me to attend and not to have three points on my licence, took priority over your Lordships’ House. I successfully completed that training. Secondly, although I am not sure whether I need to declare this as an interest, I should say that I live 10 miles from Exeter and initiated the Motion of Regret when the previous Government were in power.

I find it odd that the noble Lord, Lord Howarth, should talk about the irresponsibility of this Government when the previous Government were patently acting entirely irresponsibly in putting forward both Exeter and Norwich at a time when the Permanent Secretary, as the accounting officer, was pointing out that that was not good value for money and that the government department was likely to lose on the judicial review, as, indeed, it quite properly did.

The noble Lord is speaking to your Lordships as though this were a new event and nothing had happened before. I regret to tell your Lordships that I have come without all the documents, because I really did not think that it was necessary, but we had an enormous amount of information in the latter days of the previous Government setting out the irresponsibility of making Exeter and Norwich unitary authorities, the enormous cost that that would imply and, indeed, the damage that it would do to Devon and to Norfolk. The creation of unitary authorities at the pleasure of these two cities—big cities, I recognise—would do a great deal of damage to the counties. As a small example, the biggest town in Devon if Exeter were a unitary authority would be Exmouth, with 37,000 people. Devon would be expected to run a huge county—the second largest in England, with small towns and large rural areas— with very little money. As the Permanent Secretary said in relation to Exeter and Norwich, that would not be good value for money.

Listening to what the noble Lord, Lord Howarth, was saying, one would think that there was no past to this story, but there is a long past. I hope that your Lordships will not accept these amendments.

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[Lord Howarth of Newport]

My Lords, I should have declared my interest as a resident of Norwich at the beginning of my contribution to the previous debate. I do so now.

Government Amendment 2, to strike out Clause 1(3), raises important constitutional issues—they were raised by the judgment in the High Court—and I want to offer some remarks about them. The noble Baroness’s amendment provides that it should not be Parliament that revokes the structural change orders because, she says, it is unnecessary, given that the judge in the High Court has already quashed them. However, perhaps we could just think about the implications of this constitutional situation. Is it not in fact rather remarkable?

Is my understanding of the British constitution so old-fashioned as to be obsolete? I thought that Parliament was the sovereign law-making body in Britain. Thirty years ago, I do not think that that would have been disputed. When Parliament took the decision that we should join the European Community, Parliament knowingly and deliberately subordinated Westminster legislation to the authority of the European Court of Justice, but Parliament retained and retains the power to undo our membership of the European Union. When we incorporated the European Convention on Human Rights into our domestic law, Parliament specified that judges should be entitled to point out any inconsistencies between legislation passed by Parliament and the provisions of the European Convention on Human Rights, but specifically did not give the judges power to set aside Acts of Parliament that they deemed to be incompatible with the European Convention on Human Rights.

Meanwhile, however, over the past 40 years of judicial activism, the scope of judicial review has grown enormously. Many of us have welcomed that. Many of us, time and again, have been grateful to the judges for acting to strike down acts of an overweening and incompetent Executive. We accept the power of the judiciary to quash administrative acts by the Executive when they are in breach of the law or when procedures have not been properly followed. That is one thing. Although his arguments are debatable, I can understand why Mr Justice Ouseley found grounds to criticise the Department for Communities and Local Government and the previous Secretary of State. However, it is surely an entirely different matter when a judge takes upon himself to quash orders that have been formally approved by Parliament. The structural change orders were extensively debated in both Houses, with both Houses, thanks to the report of the Merits Committee and numerous speeches made by noble Lords, including by the noble and learned Baroness, Lady Butler-Sloss, being fully aware of the facts and the issues that exercised Mr Justice Ouseley. Being aware of those issues, both Houses voted to approve the orders.

I am told that there are precedents for the quashing of secondary legislation. Indeed, the Minister cited one to us in one of her letters. I am also told that the precedents have all been at the level of the House of Lords, the Judicial Committee of the Privy Council, now the Supreme Court. I stand ready to be corrected if my information is wrong, but I understand that, for the first time, a High Court judge has arrogated to himself the power to overthrow legislative decisions properly made by Parliament.

[Baroness Butler-Sloss]

Does the noble Lord see any difference in a judicial decision at whichever level? As I understand it, the previous Government did not appeal the decision of the High Court judge, so that is as good a decision as that of the Supreme Court. If there was an appeal pending, that would be a different matter, but the noble Lord is not entitled to say that a decision of the High Court is not as good as a decision of the Supreme Court if the loser chooses not to take it to a higher court.

[Lord Howarth of Newport]

Technically, the noble and learned Baroness is of course right. I just make two points in response. I see this as part of the creep, the continuing extension of judicial authority to supersede parliamentary authority. The other point is that the district councils, Norwich and Exeter, did not have the money to appeal against the judgment. They could not afford to do so. There is no legal aid for local authorities which suffer rulings hostile to their interests. I do not think that CLG was going to pay for the cost of their appeal. So there has never been an appeal to test that point.

[Baroness Butler-Sloss]

Forgive me for rising again, but was not the decision made against the government department?

[Lord Howarth of Newport]

The decision was made against the government department. Again, I gently point out to the noble and learned Baroness that it would be very unlikely that the government department headed by Mr Eric Pickles, who spent most of the election campaign denouncing the iniquities of unitary status for Norwich and Exeter, would appeal against the judgment by Mr Justice Ouseley. I think that is a rather fanciful objection.

We are witnessing a constitutional development that we need to ponder and that we should deliberate on very seriously. It seems to me—this perhaps reflects my old-fashioned view of the British constitution—an improper and dangerous development. I read with enormous interest, admiration and pleasure the recently published book by the noble and learned Lord, Lord Bingham, The Rule of Law. In that book, he counselled judges to walk delicately, like Agag in the Old Testament, and to proceed with very great caution when tempted to usurp the authority of Parliament. When the noble Baroness, Lady Neville-Jones, last Thursday repeated the Government’s Statement on their response to the ruling of the European Court of Human Rights on Section 44 of the Terrorism Act 2000, I asked whether the Government still accept that Parliament is the sovereign law-making body. She replied:

“As for the supremacy of Parliament, yes, of course it is supreme”.—[Official Report, 8/7/10; col. 385.]

That was, to a degree, comforting, but there seems to be an inconsistency between her outlook upon this and the outlook of CLG because the noble Baroness, Lady Hanham, made what seemed to me a very peculiar statement, coming from a Minister, in the debate at Second Reading:

“Judicial review became possible because they were orders, so it was a judgment not on a parliamentary decision, but on secondary legislation that arose from primary legislation”.—[Official Report, 30/6/10; col. 1833.]

I think that is a curious statement. Does the noble Baroness really believe that the votes in Parliament to approve the structural change orders were not decisions made by Parliament? If not, what is the status of statutory instruments? Why does Parliament spend all these hours considering secondary legislation? There are thousands of statutory instruments every year.

In proposing to delete Clause 1(3), why are the Government hiding behind the High Court? Why do they not want Parliament to use its authority to cancel the laws that Parliament has made? Do this Government, or do they not, believe that Parliament and not the High Court is sovereign? Can the noble Baroness persuade us that this Government respect Parliament? The noble Baroness urged the House not to follow the procedure approved by the Speaker to refer a Bill to the Examiners where a reasonable case is made that it is hybrid. When the noble Baroness spoke at Second Reading, she described the moving of that Motion as,

“a somewhat dubious delaying tactic”.—[Official Report, 30/6/10; col. 1798.]

I simply observe to the noble Baroness that among those who took a different view and voted in favour of the reference were two former heads of the Civil Service, three other Permanent Secretaries, four bishops, three very senior and distinguished judges, including the noble and learned Baroness, Lady Butler-Sloss—and I pay tribute to her because I thought it was an honourable vote on her part—and other extremely distinguished Cross-Benchers. They listened to the argument and took the view that the Government were misbehaving in opposing the reference to the Examiners. Whatever the noble Baroness thinks of my motives, I hope she will be respectful of their view.

[Viscount Eccles]

I am grateful to the noble Lord for giving way. Is his argument that once Parliament has made a decision—let us accept for a minute that he is right that the affirmative instruments were approved—it is in no position to change its mind and reverse its decision?

[Lord Howarth of Newport]

On the contrary, that is exactly my argument. I have asked the noble Baroness why she is simply relying on the High Court to quash the decisions of Parliament rather than having Parliament exercise its own authority to quash the decisions that it previously took. That is precisely the point at issue. I suggest that this is part of a pattern that we are beginning to see emerge in this coalition Government of an habitual disrespect for Parliament. If I may, I shall give one other instance.

[Earl Cathcart]

I thought that it was for Parliament to make the laws and for the judiciary to judge on them. In this instance, the judge said that what the Secretary of State did in coming to his decision was illegal and so he quashed it.

[Lord Howarth of Newport]

I understand that that is what the judge said, but my question is whether it is within the competence of a judge, whether a Supreme Court or a High Court judge, to overthrow orders that have been duly made by Parliament. Parliament was fully aware of all the arguments that moved Mr Justice Ouseley to arrive at his judgment, but the fact is that if Parliament is the sovereign law-making body in this country, its authority ought to prevail. That is my opinion.

I will briefly illustrate what I take to be part of an emerging pattern of disrespect on the part of the Government to Parliament. On 29 June, this House voted to approve a Motion, tabled by the noble Lord, Lord Steel, that called on the Government to table Motions to enable the House to approve or disapprove of four specific reforms that would enable this House to be more credible and effective. However, a week ago, on 7 July, the Leader of the House informed the House in a Written Statement that the Government do not intend to respect the will of the House in this regard and,

“do not consider it appropriate to table Motions”,—[Official Report, 7/7/10; col. WS 13.]

that the House has called upon them to table. He cited as justification the irrelevant fact that the Deputy Prime Minister has set in hand work on a draft Bill for an elected second Chamber. Why are the Leader of the House and the Government treating the House with this contempt?

The Deputy Prime Minister arrogantly breezes around declaring that our parliamentary institutions are not fit for purpose. This arrogance is particularly unbecoming in a Government with no mandate from the people and in a coalition that has been cobbled together and is tempted to use its majority to bulldoze this House in ways that this House has not tolerated and not expected from Governments for many years. The vote yesterday in this House on the Academies Bill on which the Government were defeated is a very salutary indication to them that they cannot simply take it for granted that they now have a majority in the House of Lords that entitles them to treat this House of Parliament with the same contumely with which Governments habitually treat the House of Commons.

We see this attitude in the big declarations and the small actions, and here in this amendment, which casually endorses the subordination of considered decisions of both Houses to an adventurous decision by a High Court judge that happens to suit the Government’s self-indulgent political agenda. How does the noble Baroness defend it?

[Baroness Butler-Sloss]

My Lords, perhaps I might be allowed to speak before the Minister replies. I start by bringing us back to what we are actually doing today, and by reminding the House that I am a Cross-Bencher. I do not support the Government or the Opposition; I support the belief that Exeter should not be a unitary authority. I have three or four points to make. I proposed a regret Motion under the previous Government that was overwhelmingly supported by this House by a large majority. The previous Government deliberately and arrogantly—I cannot resist using the word “arrogant” because the noble Lord, Lord Howarth of Newport, has used it of this Government—went ahead and ignored the will of this House, knowing that their Permanent Secretary to the relevant Ministry had said that the government department would be likely to lose when the judge took his decision. This House was in effect misled, because of course we did not have the judge’s decision; we had the facts. Most of us thought that what the Permanent Secretary said was right, but had to wait for a judicial decision. The Government decided to go ahead despite a judicial review and quite rightly lost. So it was that Government who insisted on putting through illegal orders, and that is what the judge found.

There is nothing adventurous about a High Court judge sitting in the Administrative Court deciding that local government or national government are actually acting illegally. That is the work of the Administrative Court at three levels—the High Court, the Appeal Court and the Supreme Court—and the order and decision of a judge in the High Court is as good as the decision of any court until it is reversed. So there is nothing adventurous about a High Court judge holding a government department to account. That has been happening for years and years. For the noble Lord, Lord Howarth of Newport, to talk about it being adventurous and to cast aspersions on the High Court is not what I, as a former judge, would have expected to hear in this House and I am saddened by it.

What is particularly important to remember is that this all started because the previous Government insisted on putting the orders before this House when they knew they were likely to lose before the judge, and that is what the situation has created. I am not a constitutional lawyer, but I cannot see anything wrong in orders of this House which should never have been presented because they were in fact illegal, having then been found by a judge to be so, being revoked. When the Minister said that it is not necessary for the Government to have this House revoke them because they could not stand, that was the point. They were illegal from the beginning, even though the announcement was not made until after this House was required, despite the vote against the Government, to accept that the Government would insist on going ahead.

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[Baroness Hollis of Heigham]

I understand that perfectly well, but as we did not have the outcome of the judicial review at the time the orders were being made, we were in no different a situation than that of all the previous debates, in which I think the noble and learned Baroness did not take part, where a judicial review was running alongside a debate about particular orders. If she is alleging that we should have known the outcome of the judicial review before the judge made his determination, in that case none of the previous orders would equally have proceeded until the judge had made his determination. Had the noble and learned Baroness been involved in those previous procedures, she might be aware of that fact.

So the judicial review ran simultaneously, as it did with all the other orders. As a result, because we could not and did not know the outcome of the judicial review before the orders were laid before Parliament, Parliament made its decision in the full light of information and after something like seven hours of debate. The judge then chose to overturn those orders. We could have argued it, but when the noble and learned Baroness says we could have gone to appeal, I should say that the costs of such an appeal would probably have been £500,000 or more, which would have had to be shared between two authorities. Such a sum would have represented between 5 per cent and 8 per cent on the district council tax. That is not something we can ask the citizens and ratepayers of Norwich to pay.

As for the Department for Communities and Local Government, against which those judicial orders were made, with a change of government it is clearly impossible or at least unlikely that it is going to appeal. To that extent, I hope that the noble and learned Baroness will accept that her argument that these orders were always illegal is simply wrong. You only know them to be illegal when the judgment is made—and Parliament was making its decision before any such judgment was made.

[Lord Howarth of Newport]

Is there not a distinction between conduct by the Minister in his capacity as head of a Whitehall department which the court judges to be illegal, and a decision taken by Parliament? This is a qualitatively different decision.

[Baroness Hollis of Heigham]

I entirely accept that. In the same way that if any Minister—myself in a former capacity, my noble friend or the noble Baroness opposite—were to make an administrative decision within their department—in my case it might have been about the Child Support Agency or whatever—which did not go through parliamentary scrutiny, it would be perfectly proper, and occasionally happens, that there should be a JR. At that point a judge might well say, “Minister, you have exceeded your administrative power”, and that would be fine. That is exactly what judges should do—they do it all the time—both for central government Ministers and for local government councillors. No one is challenging that. Of course there is an important key role for JR to ensure propriety of behaviour by people in official positions who carry official responsibilities.

However, that is a completely different situation from the one described by my noble friend. Parliament had seven hours of debate on these orders and—knowing all the facts alleged by Members opposite and ourselves and what they entailed—decided to support them. One judge, 1,000 parliamentarians, seven hours of debate. You can see why some of us feel that this was perhaps an intrusion on parliamentary sovereignty too far. I do not recede from that line.

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[Baroness Hollis of Heigham]

The noble and learned Baroness is absolutely right that the Permanent Secretary followed this unusual, though not unprecedented, process. As I tried to suggest in an earlier amendment—though clearly I did not make myself clear—the Permanent Secretary wanted best value for money, which meant a unitary Devon and a unitary Norfolk, as opposed to a unitary Norwich and a unitary Exeter, which represented second-best value for money, let alone the status quo, which was the worst value for money. The Permanent Secretary’s letter therefore called for an organisation of local government which only the Permanent Secretary and the Boundary Committee supported, and which even the county councils would have had judicially reviewed against themselves. That is the nature of the Permanent Secretary’s request for a direction. Therefore, given that we are not debating unitary counties—I am afraid that now it is past that point—the issue is status quo versus unitary, not status quo versus unitary versus unitary county. Had that been the case, the Permanent Secretary's advice would have been correct and we would have had a very different outcome.

I go back to the electoral point. It is the DCLG, not Norwich or Exeter, that lost the JR, and the department should take responsibility for its actions. With appropriate behaviour—a letter, for example—it could have abated this problem and the orders would not have been quashed. It is not reasonable that two cities that have acted lawfully on every day and at every stage of the process should pay the bill because the DCLG failed to act prudently. The costs of £100,000 in Norwich and perhaps another £80,000 in Exeter, with additional costs for all the local parties, will be incurred not because of what the cities did but because of the failures of the department.

Therefore, first there is the issue of costs. Secondly, as far as concerns these elections, there is the issue of timing, which my noble friend explored. I understand that the DCLG has advised Mr Pickles that the elections should take place within 35 days. This comes into the same category as the weak advice from the department, or its failure to act appropriately, that we have seen throughout this saga. On the opinion of a counsel specialising in electoral law, the DCLG is wrong. The Minister, Mr Pickles, is assuming that these are casual vacancies to which 35 days would apply. Casual vacancies are defined in Sections 83 to 87 of the Local Government Act 1972, which was Mr Peter Walker's disastrous attempt to impose unitary counties across the country—and, belatedly, some district functions. However, these are not casual vacancies. I am sure that the noble Baroness has checked the legislation. Section 83, for example, tells us what counts as a casual vacancy: it is when there has been a failure to make a declaration of office. Section 84 deals with the resignation of an office holder, Section 85 covers the case of a councillor who has failed to attend meetings, Section 86 deals with councillors who are no longer living or working in the area or who have been disqualified for a personal offence that has resulted in imprisonment, and Section 87 covers death. In all cases, the casual vacancies relate to a particular councillor. None of the sections applies to what has happened here, which was the inadvertent failure of returning officers to hold the ordinary elections in May 2010 because they were following the existing orders that were in place until Parliament or a JR struck them down.

If we are right—and we are confident that we are—this means that elections are not necessary within 35 days because the vacancies are not casual. As 35 days would take us into August, that produces major democratic issues. We are not challenging—because we cannot—the need to hold by-elections. We are challenging, first, where the costs should fall, and secondly, whether the elections should occur within the 35-day deadline, which they clearly should not. A date in September, a couple of weeks later, after the school holidays, might make the difference between a 15 or 20 per cent turnout and a 40 per cent turnout.

To ask local authorities to spend £100,000 on local elections because of the failure of the department, and then to order that they must occur in August when a large proportion of the electorate will be away, compounds a democratic deficit on to departmental negligence. The law, which I have gone through, does not require it. Therefore, I hope that the noble and learned Baroness will accept that by-elections can take place in September, for example as soon as the school holidays are over, and that there should be an appropriate recognition of the department's responsibility for their cost.

[Lord Howarth of Newport]

My Lords, I add my support to the arguments made by my noble friends Lord Rosser and Lady Hollis on Amendment 4. Significant and unbudgeted additional costs would be created by these by-elections, if they occurred. I refer not just to the cost to the authorities—£80,000 for Exeter and no less for Norwich—but to the costs for the parties and candidates. This would come at a time of severe financial pressure on the local authorities.

This situation has been brought about through no fault of either Norwich or Exeter. The judicial review was taken out by the counties against the CLG and not against Norwich and Exeter, and it seems unjust that council tax payers in Norwich and Exeter should have to foot the bill for it. In Exeter, the cost has already been computed at no less than a 1.8 per cent increase in council tax, which is a significant burden to land on local people.

It would be open to the Government to amend the Bill to reinstate the councillors who were unseated by the High Court on 5 July and to defer the elections on the original plan until next May. That would save money and would restore an orderly situation. As it is, if Section 2 is simply deleted, the leaders of all the opposition groups in Norwich will be unseated.

[Viscount Eccles]

My Lords, I am grateful to the noble Lord for giving way. The amendment does not go to the point of how elections should be held; it goes only to the point of a report being prepared. Surely the proposers of the amendment are simply suggesting an ex post facto report, and the statutory obligations of Exeter and Norwich to deal with the matters that arise from the High Court judgment is being left to them. We are not being asked, either in the Bill or by the amendment, to interfere in those statutory arrangements.

[Lord Howarth of Newport]

My Lords, my noble friend Lord Rosser has explained the statutory situation fairly compellingly. The reality is that a mess—a chaotic situation—is being created by a combination of this legislation and the judgment in the judicial review. In looking at the predicament of these authorities, it is our responsibility as parliamentarians to consider what can best be done to help them. After all, if all the opposition leaders in Norwich are unseated and in Exeter the leader of the Labour group is unseated, a third of the seats on the city council are vacant and 13 by-elections are required to be held at short notice in the summer holiday period, that is not good for local democracy, although the Government profess to be interested in improving the quality of local democracy.

[Baroness Butler-Sloss]

Following on from the noble Viscount, Lord Eccles, perhaps I may ask what the point of this amendment is. Everything that is being said by the noble Lord, Lord Rosser, and the noble Baroness, Lady Hollis, we have heard before, but the amendment does not help on any of the points that are currently being made. I wonder why that is and why other, useful amendments were not put forward.

[Lord Howarth of Newport]

Because we are trying to deal with the wreckage left behind by Mr Justice Ouseley. The judges can interpret the law regardless of the practical consequences, but it is open to government and Parliament to repair this judicial damage.

[Baroness O'Cathain]

I thank the noble Lord for giving way. From listening to a lot of this debate, I rather understood that the wreckage was caused by the previous Government in the first place.

--- Later in debate ---

[Lord Howarth of Newport]

The noble Baroness is entitled to her view. If the Government, who could do so, will not restore order to the chaos that the court has left behind, will they at least pay the costs which CLG policy has imposed on Norwich and Exeter? They are authorities with very small budgets—so small that they cannot afford to appeal against the judicial review—and the Government are driving them into deeper poverty by their decision to freeze council tax.

[Baroness Shephard of Northwold]

I apologise to the noble Lord for intervening again—he has accepted interventions with great grace—but I ask him to consider how the mess was made. I ask him to consider also that Members opposite were warned what might happen if the orders were quashed. I quote from the debate in this House on 22 March when his noble friend Lord McKenzie was asked whether it would result in electoral chaos if the orders were quashed. The noble Lord replied:

“In relation to the elections that did not take place, the councillors would cease to hold office as a result and vacancies would have to be filled in the normal course of events”.—[Official Report, 22/3/10; col. 827.]

That could, of course, have been prevented. I do not recall and Hansard does not record the noble Lord or the noble Baroness protesting about the nature of that response from the noble Lord, Lord McKenzie, on that day.

[Lord Howarth of Newport]

It is always a pleasure to take an intervention from the noble Baroness. She has held elected office in Norfolk for many years and I am sure that she is concerned that the people of Norfolk should be extricated as best they can be from the mess in which they find themselves. Whether the mess was caused by the previous Government or this Government or the High Court has been debated up hill and down dale. It is not particularly profitable to return to that. We are faced with the practical problem of how to restore order to this chaotic situation in the best interests of local democracy.

[Lord Rennard]

In our debate on the orders put forward on 22 March, I pointed out that the only effect of approving those orders may well be to deny people in Exeter and Norwich the right to elect their councillors in May, when they would normally have done so, when many other local authorities did so and when they were also voting in the general election. Of course, it would have been much cheaper to have held those elections together on that day. That is why I continue to think that it would have been better if those orders had not been approved and the fatal amendment tabled by my noble friend Lord Tope had been carried. However, because those orders were not blocked and because, as so many people predicted, they were struck down by the High Court, additional costs and additional stresses are now being unnecessarily incurred.

I would be interested to see what a report on costs incurred would show. It does not seem right to me to legislate for the Secretary of State to lay such a report before Parliament. No doubt the issue of costs will be raised in the future and there will be many attempts to apportion blame for them. My conscience is clear on the matter of costs. We need to move on and this is an unnecessary amendment. The sort of information that such a report would lay before Parliament should be available to all of us anyway, but in relation to costs and having listened to the recent contributions, I feel that some apology should be forthcoming from those who were responsible in the Department of Communities and Local Government, who got us into this mess at the time.

--- Later in debate ---

[Baroness Butler-Sloss]

In opposing these amendments, I shall give a slightly different perspective. I am not in a position to say what happens in Norwich and Norfolk, but I have just been taking some advice from a senior representative of Devon County Council who has been listening with great interest to this debate. I am told that for the past 10 years, Exeter, in joint stewardship with Devon County Council, has outperformed the national average in a very successful way. There has been a fruitful partnership between Devon and Exeter. The relationship between them, despite all of this, is good, and as soon as the inconveniences that have arisen because of the order in relation to Exeter have finally been put to rest, it is the intention of Devon County Council and Exeter City Council to look to go further and better on economic development in a way that has already been successful, and they expect to be even more successful in future.

There are three areas to which I shall refer in particular. The first is economic development, which I have already mentioned. The second is highways—there has been very close co-operation between both councils on highways—and the third is cultural activities, which have also been very successful. These proposed amendments are bureaucratic and, in my view, unnecessary. They are undoubtedly unnecessary for Devon and Exeter, and I very much hope that the Committee will not wish to support them.

[Lord Howarth of Newport]

I shall speak in support of Amendments 5 and 6. They must surely meet with the Government’s approval, making, as they do, for transparency, accountability, equity and localism. Mr David Cameron, setting out Conservative Party policy in November 2009—before he was Prime Minister—said:

“We will require the people and organisations acting for the state to be directly accountable to the people they are supposed to serve ... Through decentralisation, transparency and accountability we can give people power over the services they use, over the way their tax money is spent, over how their local area is run”.

It is surely self-evidently right that people in Exeter, Norwich, King’s Lynn and Yarmouth and people across the whole of Devon and Norfolk should have the right to know how the county council’s resources are being spent, district council by district council, across the range of service areas: social care, children’s services, highways maintenance, culture and libraries.

I have a report from Exeter that is rather different from the report that the noble and learned Baroness, Lady Butler-Sloss, has just received from her friend on Devon County Council. I am advised by a very senior person in Exeter that, as in Norwich, they simply cannot establish with any accuracy or confidence how much the county council spends on services in Exeter or what its performance in delivering them is.

We recommend from Norwich that, by 30 September each year, Norfolk County Council should be obliged to provide a detailed analysis of the money that it has spent and the services that it has delivered in each district council area in the previous financial year. Moreover, I propose that, when the county makes its budget for the year to come, it should equally set out in detail what money it proposes to spend on what services in each district council area. It would not be difficult for the authority to produce the financial information in that form. If it were to do so, that would cast light on whether Norfolk or Devon has been in good faith in claiming to be equally committed to the good of all the communities in the county, with their greatly varying needs, and how effective these counties have been in addressing those needs. We will see, for example, what progress the counties have made in tackling inequalities in educational attainment and in ameliorating social deprivation. Such issues are enormously important in themselves but are particularly so in this context because, in rejecting the case for unitary authorities in Norwich and Exeter, the counties, supported by the Government, claimed that they could deal with these problems better. Taxpayers and citizens are entitled to see the evidence on that as it emerges.

This clarity of accounting would also better enable productive partnerships between the districts and the counties. We believe that there should be a Norwich City Council scrutiny committee with the responsibility of scrutinising Norfolk County Council’s policies and spending in the area of the city. It is remarkable, as has been mentioned before in our debates, that not one member of Norfolk County Council’s cabinet lives in or represents any part of the Norwich City area, yet that cabinet routinely takes decisions that have major impacts on the lives of people in the city. My noble friend Lady Hollis explained to the House just now the fatuity of the Norwich area committee. Does the noble Baroness, Lady Hanham, defend this lack of accountability? Having unitary authorities would have dealt with this problem. These are the last amendment of the afternoon and this is her last chance to accept at least these amendments.