Public Bodies Bill [HL]

Lord Hunt of Kings Heath Excerpts

Monday 29th November 2010 Lords Chamber

[Lord Hunt of Kings Heath]

My Lords, the noble Lord, Lord Greaves, is right to remind us of our previous debates on sustainability and climate change. I recall the days when the noble Lord, Lord Taylor, was standing here and urging the Government to do better. He now has an opportunity to show that he is consistent in taking this message into government.

The noble Lord, Lord Greaves, has pinpointed a potential weakness in the construct of the Bill. Noble Lords will know that the Bill allows a Minister by order under Clause 1 to transfer a function that is being abolished to an eligible person. The definition of eligible person includes in Clause 1(3)(a) to (e) companies limited by guarantee, community interest companies or a body of trustees or other unincorporated body of persons. Subsequent clauses extend the ability of Ministers to transfer functions of bodies listed in Schedules 2 to 7.

It would be helpful to know the criteria under which functions of public bodies might be transferred—in particular, to companies or unincorporated bodies of people. So little information is available. The impact assessment is distinguished by its inability to give any figures whatsoever for the financing consequences of the Bill. In particular, the Bill and the Explanatory Notes are silent about how desirable government policies will be transferred when those functions are transferred to companies or to unincorporated bodies of people. Sustainable development is a very good illustration of the point. We are told that the current Government are taking forward desirable policies on sustainability. Those policies relate not just to central Government but to local government and to other public bodies. Many of the organisations listed in Schedules 1 to 7 would be expected to enact the general principles of government policy on sustainability.

If those functions are now to be transferred outside the public domain into companies or into unincorporated groups of individuals, the question arises: how do we ensure that sustainability issues will be carried forward? How will that be monitored, or are the Government saying that, once a function has been transferred outwith the public sector, they are washing their hands of it and there is no guarantee that sustainability issues will be carried forward? That is an important debate.

[Lord Taylor of Holbeach]

I am very grateful to my noble friend Lord Greaves for bringing forward this amendment. As the noble Lord, Lord Hunt of Kings Heath, made clear, I am well rehearsed on the arguments for sustainability and I would like to think that the Government too share the conviction that sustainability lies at the core of good governance within government.

This amendment seeks to add a further requirement that when functions are transferred from one body to another, the duty to promote sustainable development transfers along with the function, whether or not the duty is set out in statute. I am happy to confirm to my noble friend Lord Greaves that the Government absolutely share his desire to make sustainable development a key part of public life and a consideration that runs through everything we do.

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[Lord Taylor of Holbeach]

I think I have answered the question as best as I can. I cannot refer to a television programme which I have not seen, so it would be best if I were allowed to move on by stating the general principle that underlines our approach to this amendment. I consider it to be useful because it does indeed give us the opportunity to debate the issue of sustainability within the context of this Bill. No doubt it will arise when we come to further issues and parts of the schedules.

Where we differ from the amendment is how we go about achieving this important objective. We believe this amendment would go further and potentially add unnecessary bureaucratic hoops through which some public bodies will have to jump. It is a general and not a specific requirement to those bodies which already have a sustainability requirement. We do not want public bodies to get distracted by having constantly to prove to us that they are delivering sustainable development. We expect it of them. We do not necessarily expect them to be saying that they are doing it all the time. We want them to get on with delivering their core functions in a sustainable way.

The noble Lord, Lord Hunt, asked specifically about when private companies are involved in delivering a service that is currently undertaken by a public body. It is up to the relevant Minister in charge to determine how much they will be held to account, for example by attaching conditions to the contract or funding agreement. It is then for that Minister to account to Parliament and the public for such decisions. This reform programme is about making public bodies more accountable and more efficient.

[Lord Hunt of Kings Heath]

Does the noble Lord agree that one of the problems with this Bill is that potentially all the functions listed in Schedules 1 to 7 could actually be transferred to a company or a body of trustees or other incorporated body of persons? This is our problem with debating this Bill. The powers that it gives to Ministers are so draconian that all of these functions could find themselves in the private sector in one way or another.

The Minister is saying that we should not worry because it will be up to each Minister to decide whether in any contractual situation they may or may not put something in about sustainability. But does he accept that our problem is that that gives far too much control to Ministers and that parliamentary oversight is very limited?

[Lord Taylor of Holbeach]

On the contrary: Ministers are accountable to Parliament. If Ministers do not perform how Parliament expects, it is up to Parliament to make that clear. I have no difficulty with this. It is about making Ministers accountable for the conduct of the public sector. We want to mainstream sustainable development so that it is not a bolt-on option, but integral to everything that public bodies do. But we are committed to doing it on a non-statutory basis. For that reason, I ask my noble friend to withdraw his amendment.

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[Lord Hunt of Kings Heath]

My Lords, perhaps I may reassure the noble Lord that we have found a better place to bring it back so we will have an opportunity to debate it later in Committee.

[Lord Greaves]

My Lords, that is one assurance I can well believe.

This amendment is about keeping some of the safeguards which exist in legislative form in relation to some of the bodies listed. There are many more safeguards of different sorts which are in legislative form at the moment. One of the real concerns over this Bill is the process by which Parliament will be able to scrutinise and the Government will be accountable to Parliament in the discussion of whether these safeguards are going to remain. Ministers are indeed accountable to Parliament, but ministerial accountability to Parliament at the Dispatch Box, when we can ask questions and raise debates and so on, is rather different from legislation written down in the statutes of the land, in the law of England, which can, if necessary, be challenged in court. It is a different sort of accountability if people are responsible to the courts of the land for following the laws which have been set down by Parliament. It is in many ways a much more robust form of accountability and we are concerned that it is going to go if, as the Minister says, the Government prefer that all this is done on a non-statutory basis. The ministerial orders which will be responsible for making a lot of the changes proposed to the organisations set out in the schedules are in themselves legislation. To suggest that a lot of it will be non-statutory suggests that those orders will not contain these safeguards, and that, too, is a major concern.

These are important issues which go beyond the particular issue of sustainable development and I am sure they will come up again and again as we continue to debate this Bill. For the moment, I beg leave to withdraw the amendment.

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[Baroness Henig]

This is a probing amendment arising from the fact that Schedule 1 includes a collection of very different bodies in terms of the Government’s intentions as to their functions, powers and duties. It is a very miscellaneous group and I think we can discern four or five categories. For example, there are some bodies that are for straight abolition, and British Shipbuilders would fall into that category. There is then a second category where the powers, functions and duties will revert back to Ministers or to departmental civil servants. Then there is a third category where the powers, functions and duties are being transferred in whole or in part to another public body. And there is yet a further category where powers, functions and duties are being transferred in whole or in part to a private body, for example Consumer Focus to Citizens Advice. Then there are some like the Security Industry Authority—I declare an interest as chairman of that body—where the powers, functions and duties are going eventually, via phased transition, to a private body but with a residual public function.

When my noble friend Lord Whitty and I were looking to try to devise an amendment, we could not allocate these different bodies to the different categories without naming each one of them, which we found impossible to do. That is why, as I say, this is a probing amendment. Does the Minster recognise that there are different consequences, not least for Parliament, of the different intentions for bodies in Schedule 1? I am asking for these to be spelt out in the Bill because they materially affect what is going to happen to these different bodies.

On Amendment 11, my noble friend Lord Whitty was looking to delete “other incorporated body” as an eligible body to transfer into on the grounds that he found it too wide and too unaccountable in terms of its range. So the gist of these amendments is to try to get some coherence and recognise that different bodies should be dealt with in different ways. I beg to move.

[Lord Hunt of Kings Heath]

My Lords, I support my noble friend in her amendments. As we have already briefly debated, Clause 1(3) is very important because it specifies which bodies and functions can be transferred from the bodies listed in the schedules. My noble friend is, first, seeking clarity and then, importantly, asking the Government questions, particularly about their ability to transfer functions to an unincorporated body of persons.

I find it surprising that the noble Lord is proposing to give himself power to give such functions to a group of unincorporated persons. It would be helpful if he could explain under what circumstances this could happen and what safeguards would be in place. In a sense we are following on from our previous debate. Will the accounts of such organisations come under the auspices of the Comptroller and Auditor-General? Will freedom of information or data protection legislation apply to the same extent as when functions are delivered in the public sector? Potentially all the functions carried out by all the bodies listed in these schedules could be transferred to such bodies. My own view and that of the Opposition is that those powers are far too open-ended. The noble Lord has said that in the end accountability is to Parliament, and that is so. However, the problem we have, as the noble Lord, Lord Greaves, has spotted, is that it is likely that even when we have orders, they will in themselves give considerable discretion to Ministers in their dealings with the functions that are encompassed by the bodies listed in the Bill.

When it comes to the orders, we have another problem. We have the Cunningham committee’s report on conventions. We debated that in Question Time this afternoon. But the noble Lord, Lord Taylor, will know that the conclusion of the Cunningham convention in relation to this House seeking to defeat secondary legislation is now disputed by the noble Lord, Lord Strathclyde, the Leader of the House, in correspondence between himself and the Merits Select Committee which has been published in the past few weeks. So we are not even sure at this stage whether the Government even accept that it is the right of this House to vote to seek to defeat the Government on secondary legislation.

Behind the amendment moved by my noble friend lies a real concern about the draconian powers being given to Ministers and a doubt whether the kind of parliamentary scrutiny currently envisaged in this Bill is sufficient to ensure proper discharge of ministerial accountability to Parliament.

[Lord Pannick]

My Lords, I should like to add a question to the series of questions put by the noble Lord, Lord Hunt of Kings Heath, and give my support for the amendment tabled by the noble Baroness, Lady Henig. Is it the Minister’s understanding that if these functions are transferred to a company limited by guarantee, for example, judicial review in the courts would apply to the exercise of those functions by such a body, and would the Human Rights Act apply where appropriate to the content of any decision taken by such a body? This is of obvious importance because if the answer is no to either of those matters, the very important safeguards that exist when the functions are exercised by public bodies would be lost.

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[Lord Taylor of Holbeach]

The noble Lord, Lord Rowlands, has made an interesting suggestion. I think that by the time we have gone through a number of debates on individual bodies, noble Lords may well have quite a substantial idea of the pattern that the orders may well form. I hope to be able to provide noble Lords with the background to a lot of the changes that are anticipated by this legislation.

Perhaps I may respond to some specific points. The noble Lord, Lord Hunt—it might have been the noble Lord, Lord Pannick—asked about audit. Where public bodies are retained as a result of the 2010 review process, and in particular where functions have been transferred to them from other bodies, I assure the Committee that they will continue to be subject to the existing requirements for accounting, reporting, and data confidentiality issues. NDPBs are required to have in place robust governance and accountability arrangements, and both the Cabinet Office and the Treasury provide detailed guidance on the matter. Published annual reports and accounts are the main vehicle by which departments and public bodies regularly inform Parliament and the public about their activities and expenditure.

On freedom of information, I further reassure the House that where bodies already subject to the Freedom of Information Act are merged to form new arm’s-length bodies that are established by and at least partly constituted by appointments made to government, steps will be taken to ensure that they fall within its scope. Where a body’s functions are transferred to another body that is already subject to the Act, they will naturally be subject to that Act.

[Lord Hunt of Kings Heath]

Will the noble Lord clarify one point? My assumption is that when a function is transferred to a company, a board of trustees or an unincorporated group of people, the FOI requirements will not be so transferred. Am I correct?

[Lord Taylor of Holbeach]

It is surely up to the Minister to determine to what extent that is transferred. It is certainly not referred to here as being an obligation on any transfer. One would expect any orders that are presented to be covered by the Explanatory Notes accompanying any secondary legislation.