Bus Services Bill [HL]

Debate between Lord Shipley and Lord Berkeley

Wednesday 20th July 2016 Lords Chamber

[Lord Shipley]

My Lords, I could not agree less with the noble Earl, Lord Attlee, on this matter. The grounds that he has produced seem to relate to a potential conflict of interest where the local authority is a franchising authority. Clearly, there could be—but, of course, not all contracting will relate to franchises. A whole set of partnership arrangements will be possible. The noble Earl is asking the wrong question, if I may say so.

I remind the Committee of my vice-presidency of the Local Government Association. Clause 21 is a very bad clause and I hope that the Minister understands that it will become a major issue on Report if the matter is not resolved. The clause is headed, “Bus companies: limitation of powers of authorities in England”. Of course, it does not apply in Wales, where local authorities would have the right to continue to create companies if they wished to. But that right to form a company exists now and it seems to have worked. So it is not clear why the Government have decided to include this clause in the Bill, which is otherwise, as the noble Lord, Lord Whitty, pointed out, by and large very good in many respects. Many of the amendments we have been discussing are matters of detail that would enhance what is already a good Bill.

I remind the Minister that five years ago this House passed the Localism Act 2011, which granted an extension of powers to local authorities with an associated general power of competence. That is not to say that local authorities then take on that power and start creating lots of companies, but it means that they have the power to do so should there be an occasion when it seems necessary and in the public interest so to do. It is therefore wrong in principle to remove the right of local councils to do that.

So I hope the Minister will understand the strength of feeling about this issue, and I hope that he will be able to explain to the House why the Government think it is necessary to strike out a power that local government currently has, which has served local government well and would potentially improve public transport networks rather than make them worse.

[Lord Berkeley]

My Lords, my reading of this clause is that even those authorities that are running bus services now will not be able to do so in future. That is very serious. To respond to the point made by the noble Earl, Lord Attlee, if a local authority wishes to run a bus service, it does not need a franchise itself: it can just run the service. Ditto, it does not have to have an enhanced partnership with itself: it can just run the service. So it seems to me that if the local authority wanted to run the service it could just do it if this clause was not there. It does not need to have a conflict of interest.

I support all noble Lords on this side of the House who have spoken. This is a really bad clause. It has many similarities with the railway industry, which we can go into. I very much hope that we will see the end of it quite soon.

Bus Services Bill [HL]

Debate between Lord Shipley and Lord Berkeley

Monday 4th July 2016 Lords Chamber

[Lord Shipley (LD)]

My Lords, I should first declare my vice-presidency of the Local Government Association. In principle, I am in favour of the right of local authorities to franchise bus services. However, I expressed concern at Second Reading that the audit and scrutiny of proposed franchises needed to be tightened up, and I remain of that view.

I also said at Second Reading that the Cities and Local Government Devolution Bill required substantial amendment to improve the effectiveness of audit and scrutiny to ensure public confidence in the financial robustness of franchising arrangements. Now, as the noble Baroness, Lady Scott of Needham Market, has pointed out, on Friday the Public Accounts Committee in its sixth report of this Session expressed some serious concerns about the extent to which consideration by central government of the local scrutiny arrangements had been adequate.

I quote, in particular, from its summary, which states:

“There has been insufficient consideration by central government of local scrutiny arrangements, of accountability to the taxpayer and of the capacity and capability needs of local and central government as a result of devolution”.

I have absolutely no doubt that local government may have the required capacity and capability—certainly in a number of places with which I am familiar. That is not to say that it cannot gain the capacity and capability to undertake successful franchising. However, I subscribe to the view that there has been insufficient consideration of this issue by central government and it really does matter.

In consideration of previous amendments, I noted that the Minister said that mayoral combined authorities were appropriate for taking forward the policies in this Bill and would have the necessary checks and balances in place. These amendments improve the checks and balances that the Government seek. If the Government listen very carefully to what is being said across your Lordships’ House, it is much more likely that franchising will succeed, and I am very keen that it should do so.

There are three amendments in this group. The one to which my name is attached tries simply to make it clear that the auditor should be independent of a local authority or a combination of local authorities. The other two amendments are in the same area, but address issues around affordability, value for money and the role of traffic commissioners. There are various ways in which that could be progressed. The Minister may say that this can all be addressed in regulation. However that is done, I hope that the Minister will be able to come back on Report—if he is not able to do so now—to explain that there is an understanding of the issue that the auditors’ scrutiny function in this case must be robust and seen to be robust and how the Government plan to take this forward to ensure that the public can have confidence in franchising arrangements.

[Lord Berkeley]

My Lords, on the amendments that we have discussed in Committee, many noble Lords have said how important it is for devolution to happen and for local authorities around the country to be able to operate franchises without too many controls from central government. Whether that happens or not, the importance of independence in the audit is vital, as other noble Lords have said. It would be so easy for some local authorities in the future to get it wrong and then for a rather nasty article to appear in Private Eye, suggesting that the leader’s brother-in-law was the auditor. I am sure that would never happen, but we do need independent checks. My noble friend Lord Snape’s suggestion of traffic commissioners appointing the auditor has enormous merit. The two issues in Amendment 42 in the name of the noble Lord, Lord Bradley, and myself, about the affordability of the scheme and whether it represents value for money, are the two most important ones that should be focused on by the auditor. Then we would all feel comfortable that it would probably work very well.