Local Audit and Accountability Bill [HL]

Lord Shipley Excerpts

Tuesday 21st January 2014 Lords Chamber

[Lord Shipley (LD)]

My Lords, I shall speak specifically to Amendment 18. I refer to the Explanatory Notes on the Commons amendments that have been published, and in particular to that on Amendment 18 in relation to health service bodies, which says that,

“an auditor will have to provide an opinion on value for money only if the auditor is not satisfied in respect of that matter”.

I want to raise the issue of health and well-being boards, which are shared across the health service and local authorities, in terms of identifying how they can work more closely together and how best value can be achieved.

My question is: who audits the health and well-being boards? They have a clear role in driving improved health outcomes. I realise that different bodies are spending money, and are therefore audited for that role, but there is a broader question about how those boards steer policy and make good decisions that reflect acknowledged best practice, and achievements in other areas by other health and well-being boards. I would like to think that an auditor has a clear role in identifying whether value for money is being achieved by individual boards—I suspect that this will become important over the next two to three years, as the success of those boards is assessed—and whether, indeed, the health service investment and the sum of money available to local authorities are adequate for purpose.

To this end, I suggest to my noble friend the Minister that one of the National Audit Office’s thematic studies that are promised as part of the Bill could look at the joining point between local authorities and the health service, specifically in relation to adult social care but more generally in terms of improving health, preventing a decline in health and to reduce inequalities in health outcomes. I think that there is a role for an auditor in that area. An auditor would have to provide only an opinion on value for money if he or she is not satisfied in respect of a specific matter. I think that the issue goes a little further than this. I would like to think that some strongly proactive work would be undertaken by the National Audit Office and auditors who are looking at the role of health service bodies and local authorities’ work in the health field.

[Lord McKenzie of Luton]

My Lords, I thank the Minister for her detailed explanation of the amendments in this group. Our discussion on them has been widened by a very pertinent inquiry from the noble Lord, Lord Shipley. We have generally seen these amendments as tidying up and consequential measures. We have issues around: the duty of auditors of health bodies to prepare a report; the provision of sequencing of electors’ rights concerning unlawful items of accounts; the procedures for auditors to be able to recover costs when there is no formal action they can take; copies of recommendations or public interest reports of functional bodies of the GLA to be sent to the GLA; and the drafting changes arising from the fact that the Mayor’s Office for Policing and Crime will cease to be a connected entity of the GLA. We have gone through these measures and are content with them.

--- Later in debate ---

[Baroness Stowell of Beeston]

My Lords, I beg to move that this House do agree with the Commons in their Amendments 27 to 29 en bloc. I shall speak also to the other amendments in this group.

These amendments would provide advance certainty to local government over timings, so they can be confident that any delay in Parliament will not impact on their budget-setting timetable.

Commons Amendments 27, 37, 39 and 40 provide that if the Bill is passed by 5 February, the likely date by which the referendum principles for 2014-15 must be laid before Parliament, the clause takes effect immediately. If not, the changes would take effect by order and relate to the financial year 2015-16. Commons Amendment 29 gives detail of the changes required if the clause was to be commenced by order and relate to 2015-16. This includes amending transitional provisions to ensure that council tax comparisons could be made on a like-for-like basis between 2014-15 and 2015-16.

Commons Amendment 28 is a minor amendment to clarify that the current clause does not reduce the existing discretion of the Secretary of State when determining categories of authority for 2014-15.

These amendments were proposed at Report in the other place as a precautionary measure to remove a risk that local authority budgeting could be adversely impacted in the event of any delay to the Bill. The Bill has not been delayed to date and, subject to the decisions of your Lordships’ House today, is on track to reach Royal Assent well before local authorities begin setting their budgets. If this remains the case, barring the minor clarification of Amendment 28, this group of amendments would not alter the operation of the clause from the version first introduced into this House.

With this explanation, I hope noble Lords will see fit to accept the amendments.

[Lord Shipley (LD)]

My Lords, could I make a brief point about Amendment 27 and the group as a whole? It relates to the issue of principle, which it is important that we restate. I do not like centrally imposed targets for increases in local taxation. The reason is simply this: there is a principle that localism means local decision-making, and those who are elected at local elections should make those decisions. We have various definitions now of what is seen to be relevant expenditure. Is it spending power? If you compare spending power to the amount of government grant, or to the amount of money paid on average by council tax payers or at band D by council tax payers, you get very different sums. In the end, we are reliant on the ballot box in each council area to decide who represents a ward, who then come together and make decisions about how that council is to be run. In my view, that includes the level of council tax.

I understand that we have debated that before and that debate has no doubt been held in the other place. I hope that somebody will decide to hold a referendum on the issue of council tax and the proposal that there should be a higher increase than the amount that the Secretary of State would prefer.

Therefore, this remains an issue of principle: local authorities are the people who should decide the level of council tax and they should be responsible to their electors, on the principle of localism. They will stand or fall at their ballot boxes by the decisions that they themselves take.

[Lord McKenzie of Luton]

My Lords, this amendment takes us back to the thorny issue of council tax at referendums. We have just heard from the noble Lord, Lord Shipley, about his opposition to centrally imposed targets; he has been very consistent on that issue. The fundamental policy change provided for in the Bill is the inclusion of the definition of a relevant amount of council tax—certain levies. Previously, any increase in council tax resulting from an increase in levies could not have caused a determination that the level of council tax was excessive, and would not have triggered a referendum requirement.

Debates in your Lordships’ House and in the other place highlighted a number of concerns, namely that the referendum regime places the burden on major preceptors and billing authorities who have no direct ability to influence the amount of the levy or to cause a levy body to reduce its levy; that factoring in 2013-14 council tax increases into referendum criteria introduces an element of retrospection potentially penalising authorities for decisions made before the Bill was introduced; and that it would undermine certain infrastructure projects that relied on an increase in levy stream and that were negotiated as part of a city deal. The example of Leeds has been cited in this regard.