Localism Bill

Lord Shutt of Greetland Excerpts

Monday 10th October 2011 Lords Chamber

[Lord Beecham]

My Lords, I have some sympathy with the noble Baroness, and welcome her on her return from her homeland. I trust she has not been suffering from jet lag; I will not detain her too long.

I am not sure that the amendment is necessarily the right way to deal with this. My understanding is that in conservation areas there are provisions under the Town and Country Planning Acts for steps to be taken to maintain properties of this kind. It is not without interest that in Edinburgh recently there have apparently been problems with requirements being imposed on local residents by the local authority—who appear to have powers similar to those advanced in this amendment—which have caused some controversy. Apparently large sums of money have had to be laid out on improving or maintaining properties, and some of those who are benefiting from those expenditures have been connected with the decision-making process. That would not be applicable if the amendment were carried, and one would hope that it would not occur. Nevertheless, it is difficult to define exactly what standards would be required.

There is, however, a more general point which applies to this and the other amendments in the name of the noble Baroness, and that is the general by-law-making powers of local government. This is something I took up with the previous Administration, and some modifications were made about that issue. It might be worth the Government looking at the extent to which councils are free to make by-laws as opposed to having to have everything approved by individual departments. Alongside that, perhaps the Government could look at the question of consent regimes generally, which is something again that I have been attempting to pursue for a number of years, including in some recent Written Questions.

The noble Baroness has touched on an issue, perhaps almost inadvertently, that is worth considering: the capacity of local authorities to make particular provisions for their areas without necessarily having to have everything approved by central government. I do not know how the Minister will respond; I suspect that he will acknowledge the good intentions but say that perhaps it is not appropriate for this Bill, and I certainly would not press him to go further than that. However, I ask the Government to take back the issues of by-law-making powers and consent regimes generally, not for the purposes of this Bill, but as part of a localist agenda.

[Lord Shutt of Greetland]

My Lords, I thank the noble Baroness, Lady Gardner of Parkes, for introducing her amendment and welcome her back to Britain. Local authorities already have extensive powers to take action where a property is dangerous or having an adverse impact on the amenity of the neighbourhood. I see no need for additional powers. Under the Housing Act 2004, local authorities can tackle poor conditions across all residential properties. If a property is found to contain serious hazards, the local authority can instruct its owner to undertake any works necessary to ensure that it is safe. Inspections and any subsequent enforcement to address the disrepair can be triggered by complaints to the local authority.

Local authorities have a key role to play in identifying empty properties in their areas, and in developing strategies to bring them back into effective use. We encourage local authorities to work with owners to persuade them of the benefits of bringing their property back into use. However, where it is clear that owners are not prepared to co-operate with efforts to get their property occupied through agreement, local authorities have enforcement powers to deal with them. Further powers available to local authorities to tackle disrepair and poor maintenance include those in the Town and Country Planning Act 1990. Where properties have an adverse impact on the amenity of the area, local authorities can require that they are tidied up, repainted and, where necessary, rebuilt. I hope this will satisfy the noble Baroness and that those who are concerned will have more luck in getting their local authorities to pursue the powers that they have.

I take on board the points made by the noble Lord, Lord Beecham, on the by-law issue. I confirm that the Government will look into that further.

[Baroness Gardner of Parkes]

I thank the Minister for his reply on this matter, which he went into in detail. I am even more grateful to the noble Lord, Lord Beecham, who understood the sort of point that I was getting at. I hope we will see the day when special items of need for particular councils can be dealt with more directly in that way. I beg leave to withdraw the amendment.

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[Lord Beecham]

My Lords, again, one sympathises with the motivation behind this amendment. Quite apart from the particular case to which the noble Baroness referred, it is not a particularly attractive sight to see people hanging about smoking in the street. However, the only grounds on which orders could be made would relate to the impact of that smoking on health.

Enclosed areas are of course covered by the existing legislation, and, as I understand it, there is power to designate areas other than enclosed areas, if, in the authority’s opinion, there is significant risk that without designation persons in the area would be exposed to significant quantities of smoke—areas where, although they are outdoors, there is a concentration of people or of prevailing structures around the area that might lead to people being exposed to the smoke. If that is indeed the case, as it appears to be under the Health Act 2006, there does not appear to be any need for the amendment. I would encourage local authorities to look at that Act. No doubt the Minister in replying will have more information about that.

[Lord Shutt of Greetland]

My Lords, again I thank the noble Baroness and the noble Lord for their comments. Indeed, I have great sympathy for the amendment as it seems to me that the place immediately after the no-smoke zone ends is the problem territory, whether it is outside a public building, or wherever it may be.

The amendment would give local authorities an explicit power to make by-laws designating areas as smoke-free. The Health Act 2006 makes provision for the prohibition of smoking in enclosed public places and workspaces. It came into force in England on 1 July 2007. Section 4 of the Act provides regulation-making powers for the Secretary of State for Health to make further regulations—for England—designating as smoke-free any place or description of place that is not smoke-free under the Act. This could cover outdoor places. Therefore, if the evidence on the harms of exposure to second-hand smoke becomes more robust, and the Government’s preference for voluntary local action to extend smoke-free places where there is a clear need is shown not to be working, the Government can consider using Section 4 of the Health Act 2006 at a later date. I would say that, at the moment, the Government do not intend to make use of these powers. However, I know that colleagues in the Department of Health welcome the debate on this important issue and will continue to monitor developments and the evidence.

While we are sympathetic to local authorities making by-laws that preserve public health, our preference is to see local authorities promote the benefits of environments free from second-hand smoke on a voluntary basis. Creating smoke-free areas through legislation gives rise to complex issues, which I know that colleagues at the Department of Health would want time to consider carefully, and I do not think this is something we should be dealing with at this late stage of this Bill. As such, I am afraid that I cannot support the amendment and trust that the noble Baroness will be able to withdraw it.

[Baroness Gardner of Parkes]

I thank the Minister and the spokesman from the Opposition for their very good and sound comments. I did not mention earlier that in the particular case I referred to one person left a cigarette burning which set fire to one of the garages so there is obviously a bit more of a risk in that regard too. However, I thought that was a red herring and should not be brought up.

This is a serious issue. I do not know what will happen in the future. I appreciate the points made about this being perhaps more of a health issue and therefore I am pleased to have aired it today—what a silly remark, to say “I have aired it” when we are talking about smoking. I have taken on board the comments that have been made and thank noble Lords very much. I beg leave to withdraw the amendment.

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[Lord Beecham]

My Lords, it is almost refreshing to move from the constant headlines about the casino economy, which the world has enjoyed for the past few years, to something as substantive and reasonable as the noble Lord has brought to the House today in terms of the limited number of premises to which this amendment would apply. The key to the argument of the noble Lord is that this should be a matter for local decision within the overall context of that limited number. It seems to be entirely consistent with the approach of localism—it should be a matter for local determination—with the benefits that the noble Lord has referred to being realised in a number of places that wish to see that kind of development augmenting their current offer to residents and visitors. I hope that the Government will look sympathetically on the amendment and facilitate its passage.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have spoken on this amendment. I am aware that this amendment would make changes that some elements of the British casino industry have been seeking for some time. I can sympathise with the sentiments behind it, but this is not the right time to discuss the issues that the noble Lord raises. It is not an uncontroversial proposal and it would be wrong to assume that there is unanimous support for it either inside or outside the industry.

Seventeen new licenses were provided for by the Gaming Act 2005 aimed at contributing to economic development and regeneration in carefully selected locations. We do not know what sort of impact this proposal could have on the eight competitions to award the new licenses which are currently under way. All of those have yet to launch their processes. It would not be right to bring forward measures at this stage which could undermine these competitions and adversely affect the benefits that these new casinos could bring to local communities.

Nor should we assume that the casino industry in Britain is united behind this proposal. I understand that the industry is split over the idea. The National Casino Industry Forum supports it, but the Casino Operators Association is thoroughly opposed. That is not to say that the Government reject outright the principle behind the amendment, but there is some way to go before we could consider offering our support and we would need to look at some issues. For example, the amendment as proposed does not require the 40 or 50 currently dormant casino licences to be handed back as a quid pro quo. That might be an important gesture to ensure that any new flexibility did not lead to a substantial increase in the number of casinos.

The relevant Minister, the Minister for Tourism, who is responsible for gambling policy has met with representatives of the industry a number of times and they are fully aware of his views. I am sure that he would be prepared to consider this matter in the future in the terms that I have just outlined. With those reassurances, I hope that the noble Lord is willing to withdraw the amendment.

[Lord Clement-Jones]

My Lords, I thank the Minister for that reply. If those are reassurances, I wonder what a negative response would be. I thank the noble Lord, Lord Beecham, for his very positive response and I am grateful for his support. This is an anomaly and it should be covered by localism, the very word in the title of the Bill. On the other hand, I understand that the industry is not completely united on this. There is some wisdom in what the Minister has to say about waiting to see the outcome of the second round of the 2005 licences.

I take some comfort from the Minister’s comments that this will be kept under review. I have an awful feeling that it is never the right time and that it is easy to say that it is not the right time now. The NCIF, myself and others will be entering the lists again just as soon as the 2005 round is over and the impact of those new casinos is known because I think the good sense of this proposal is self-evident. In the mean time, I beg leave to withdraw the amendment.

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[Lord Beecham]

My Lords, I am very taken with the image of the noble Lord, Lord Jenkin, patrolling the highways and byways of rural Essex as a sort of unpaid litter warden. It is a charming thought and I am sure he did a very good job, but he should not have to. That is the message of the amendment tabled by the noble Lord, Lord Marlesford, and I congratulate him on bringing this matter to the attention of the House and hope that the Government will be able to respond. As the noble Lord said, the matter was debated in another place on an amendment moved by the Member for Gateshead, Ian Mearns, with whom I was discussing this on the train from Newcastle this morning. He received what seemed to be a sympathetic response from the Minister, Andrew Stunell, who said:

“We will certainly look carefully at the matters that have been raised”.—[Official Report, Commons, 18/5/11; col. 441.]

Time has passed so I hope that the consideration has taken place. I think it is preferable to have this in national legislation rather than leave it to by-laws. There seems to be no reason why this amendment should not be proceeded with on this Bill or at least a clear indication given that it will have some priority in other legislation. But this is really too good an opportunity to miss and I hope that the Minister in replying, even if he cannot say today that the amendment will be accepted, will indicate that by Third Reading there will be a clear position and the Government will feel able to adopt it.

Of course, as the noble Lord pointed out, this is essentially a matter of enforcement. There is little point in having regulations without the capacity to enforce them. But, as the Essex police have found out in another context, enforcing measures concerning the driving of vehicles is not necessarily straightforward. This would certainly obviate the kind of difficulties that have arisen in another case and one would hope that the Government would see the logic of that and accept the thrust of the noble Lord’s amendment, and see to it one way or another that the objective which most of your Lordships share is carried into being.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have taken part in this debate and pay tribute to the noble Lord, Lord Marlesford, and his tenacity in pursuing this issue. It is always said that this is a House of experts. I had not appreciated the expertise that we had between us about the distance from the fish and chip shop to the home. I am also an expert on this. The home where I was brought up and lived until I was 23 was the exact same distance from the fish and chip shop. It was our garden that caught the recycled newspapers which in those days were used for wrapping up fish and chips, and we had to keep shifting them, so I understand the concern that people have about litter.

This amendment would give local authorities an explicit power to make by-laws about littering from cars. Throwing litter from vehicles on to public land is a littering offence under Section 87 of the Environmental Protection Act 1990. Indeed, some local authorities successfully tackle litter louts, issuing them with fixed penalty notices. I fully acknowledge that taking enforcement action against those who litter from vehicles can often represent a practical problem. However, extending the scope of the littering offence, as was also suggested by the Local Government Group in its amendment rejected in Committee in the Commons, raises issues of fairness and proportionality. A registered keeper may be open to prosecution even though they did not commit the offence and were not present to prevent it. It may not always be a ready solution for the registered keeper to avoid prosecution by identifying who was the actual offender.

However, as has been mentioned by the noble Lord, Lord Jenkin of Roding, powers will shortly become available to London boroughs following enactment of the latest London Local Authorities Bill, currently before Parliament, which will allow them to issue a civil penalty to registered keepers where enforcement officers witness littering from a vehicle. It makes sense to learn the lessons from the application of that approach in London before moving to wider legislation—and legislation is not the only approach. Changing littering behaviour is key. That is why the Government are supporting Keep Britain Tidy in developing the Love Where You Live campaign. That work with businesses, local authorities and civil society partners will make an important contribution to changing behaviour on littering in all its forms. The Defra Secretary of State is calling together later this year representatives of vehicle hirers, motoring associations, manufacturers, service stations, et cetera, with a view to agreeing a voluntary commitment to tackle littering from vehicles.

It is one of the guiding principles of making a by-law that no by-law should reproduce national legislation, which is what this amendment would achieve. That being the case, and although I certainly support the intention behind the amendment, which is that the anti-social practice of littering should be a criminal offence, I cannot support it and trust that the noble Lord will feel able to withdraw it.

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[Lord Kennedy of Southwark]

The amendment moved by the noble Lord, Lord Lucas, raises a significant issue. I can clearly see the point that he is making. If the Government are not minded to accept it, I hope that the noble Lord will be able to give us some insight into the Government’s thinking on how they intend to deal with this problem. My noble friend Lord Beecham raised a significant point about residential property, which is probably just as important as the point about commercial property.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have spoken on this amendment, particularly the noble Lord, Lord Lucas, who moved it. The amendment would give authorities the power to reduce the liability for empty property rates. Our ability to take action on empty property rates needs to be balanced against the costs involved, the targeted support that we already provide on business rates and the overriding need to reduce public expenditure and support the economy generally by reducing the deficit. This Government have already doubled small business rate relief for two years, which will benefit about half a million rate payers, with about one-third of a million paying no rates at all for that period. We are also taking powers through this Bill to waive £175 million of backdated business rates demands levied on businesses, including some in ports.

Unfortunately, in taking these matters into consideration, support for empty property rate measures is currently simply unaffordable. While the Government have no immediate plans for reform, we are certainly keeping this matter under review. However, the Bill does give local authorities powers to provide discounts on business rates bills as they see fit, provided they fund the relief themselves. So authorities will be able to reduce bills in the way suggested by the amendment.

I hope that the noble Lord is willing to withdraw the amendment, but I assure him that the matter is under review. It is quite interesting, because I have within the papers here a note about the reliefs. In 2007-08, 2008-09, 2009-10 and 2010-11, changes were made.

[Lord Lucas]

My Lords, can I just point out to my noble friend that the effect of my amendment is not to reduce business rates but to multiply them by five times, resulting in greatly increased revenue to the local authority and the Exchequer. I am afraid that in some way his briefing is somewhat wide of the mark. I should be delighted if he would write to me when his officials have been able to revise their mathematics. As the noble Lord, Lord Beecham, clearly understands, this is about increasing the rates and increasing government revenue. I would hate it to be thought that I was in any way undermining the stalwart efforts of my right honourable friend the Chancellor to reduce the deficit.

[Lord Shutt of Greetland]

My Lords, I am delighted that the noble Lord has made those comments. I think that the officials had difficulties with this, and quite frankly so did I. I sought out the Local Government Finance Act 1998, but I am afraid that it has been amended, because the reference that he makes is not there. Immediately before speaking, I tried to check this myself, because I had some doubt about this. The whole area is under review, as it seems to have been for four years on the trot, because Chancellors and local government people have changed the position. So it is still the fact that the area is under review, but it is one that does impact on the economy. Having heard what the noble Lord said in his latter remarks, clearly, we will need to reflect further. But I cannot make any commitments at this stage. Perhaps a few tender words here and there might help us to understand exactly what he is about.

[Lord Kennedy of Southwark]

Can the Minister give the House an indication that he will come back before Third Reading? I would not want the noble Lord, Lucas, to have to come back again on Third Reading on this matter.

[Lord Shutt of Greetland]

I will certainly use my best endeavours to see that we can write to the noble Lord and that copies are placed in the Library so that other noble Lords with an interest can see the results of that.

[Lord Beecham]

Can the Minister also consider the points that I made in addition to those made by the noble Lord, Lord Lucas, for Third Reading?

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[Lord Shutt of Greetland]

I will endeavour to look at them, although I believe that they were on a different matter. Nevertheless, in the interests of moving forward, I am sure that we will be able to look at that too.

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Moved by

[Lord Shutt of Greetland]

197B: Clause 69, page 60, line 20, at end insert—
“(2A) The persons or bodies who may be specified by regulations under subsection (2)(d) include a Minister of the Crown or a government department.”

[Lord Shutt of Greetland]

My Lords we now move to that part of the Bill regarding right to challenge. The first set of Government amendments—there are eight amendments in the group—seek to improve the workability of the right and to clarify certain issues that arose in response to our recent consultation exercise and indeed at the Committee stage in your Lordships’ House. Our consultation on the community right to challenge showed there is a real appetite to extend the duty to consider challenges under the right to more public authorities, including central government departments. Seventy-three per cent of respondents on this issue supported this course of action and I believe it has the support of many in this House. During our deliberations in Committee the noble Lord, Lord Jenkin, suggested several services provided by government departments to which the right could be extended.

Clause 69(2)(d) already gives the Secretary of State the power to add other persons or bodies carrying on functions of a public nature as relevant authorities. Amendment 197B ensures that these persons or bodies could include a Minister of the Crown or a government department. Amendment 197C ensures that if the duty is extended to a person or body that exercises functions outside England, the right to submit an expression of interest will apply only to services provided by that person or body in England.

Amendment 197D responds to a query raised by the noble Lord, Lord Patel, in Committee about whether a public or local authority could be a community body. This was never our intention. In line with the definition of a voluntary body in Clause 69(6), we are therefore amending Clause 69(8) to clarify that a public or local authority cannot be a community body.

Amendments 197E, 197F, 197G and 197H are about enabling relevant authorities to determine timescales. They make changes to the provisions on the timescales associated with the community right to challenge in response to concerns raised by many local authorities, and others, during our recent consultation. These concerns focused on the difficulty of setting timescales nationally that could take account of the wide variations in services and circumstances and did not interfere with timescales for existing commissioning cycles. We agree with these concerns and are therefore amending the provisions to remove the Secretary of State’s powers to set timescales in regulations and replace them with a requirement for relevant authorities to set these timescales instead. We intend to set out in guidance, to which authorities will need to have regard under Clause 73(2), the factors they should take account of in doing this.

We have outlined what we expect these factors to be in the policy statement on the community right to challenge which was recently made available to Peers. Chief among them is the need for authorities to set timescales that give relevant bodies sufficient time—whether that is to prepare and submit an expression of interest or organise themselves to bid effectively in a procurement exercise or ensure relevant bodies are notified of decisions within a reasonable time. Authorities will also be required to publish details of these timescales.

Amendment 197E therefore removes the Secretary of State’s powers to specify the minimum periods which authorities can specify for the submission of expressions of interest. Clause 70(2) already enables authorities to specify periods for the submission of expressions of interest and Clause 70(3) to publish details of these periods.

Amendment 197F removes the Secretary of State’s power to specify the minimum and maximum periods which must elapse between the acceptance of an expression of interest and the commencement of the procurement exercise. Instead authorities are required to specify and publish details of these periods, which can be different for different cases.

Finally, Amendments 197G and 197H remove the duty on authorities to make a decision on an expression of interest within a timescale specified by the Secretary of State in regulations. Instead the authority must specify and publish the maximum time this decision will take. In order to prevent delay, relevant authorities will also be required to inform the relevant body of this maximum period in writing, either within 30 days of the end of the period for receiving expressions of interest, or where none exists, within 30 days of receiving an expression of interest. It must then notify the relevant body of its decision within the timescale it has specified. I beg to move.

[Lord Lucas]

I should be very grateful if my noble friend could go into a little more detail about Amendment 197E. He has removed there the ability of the Secretary of State to set minimum timescales. I understand what he says about flexibility. But if a local authority wishes to discourage activity under this part of the Bill, then timescales are where it will squeeze most easily. As my noble friend says, community organisations will take time to get themselves organised, to get their bids in and get them up to the standard required for subsequent scrutiny and competition. It is not clear to me in all the liberalising—from the point of view of the local authority—which is going on in these amendments, how the community, or bits of the community, can effectively appeal against, or have some notice taken, of a local authority which is setting very short timescales, which make things impracticable. There is guidance there. If the local authority does not go along with guidance, there does not seem to be any set of teeth that can be sunk into the local authority.

My experience of this is mostly in terms of parking regulations. There, again, the Government issue guidance. If the local authority goes against that guidance, no one takes any action of any description at all. Here it seems to be rather more important that in order to encourage action under this part of the Bill, there is an effective policing of the actions of local authorities to make sure that they are opening themselves up to what must be in many cases an inconvenient and, in their view unnecessary, application of neighbourhood rights and interests, with a system which they have got running very nicely, thank you very much. I would very much like some comfort that there will be an effective substitute for the backstop provided by the Secretary of State in the Bill as we have it now, which is being removed by these amendments, in cases where a local authority is acting to make this part of the Bill unworkable. I hope my noble friend can give me some comfort on that.

[Lord Shutt of Greetland]

I do not know whether I can give the noble Lord any comfort. The problem is that, on the one hand, people are asking for localism and letting the locals decide and, on the other hand, the noble Lord is saying, “Let the Secretary of State be on their back”. We cannot have it both ways. We certainly hope that people will be reasonable. For example, to have an expression of interest that is open for five minutes would not be reasonable. I should have thought that there would be other ways in localities to put a stop to that. It is as a result of our earlier debates and concerns about the Secretary of State being too prescriptive in these matters that some of these amendments have been brought forward. I should have thought that that would be appreciated by the House. But we are seeing the other view, which I know exists from time to time, that there will be recalcitrant local authorities which will not get on with things as people hope they might. I think we have moved in the right direction and, if it goes wrong and the recalcitrant authorities become a multitude, clearly something would have to be done, but perhaps we ought to trust local people and local authorities.

[Lord Greaves]

I take it that that was not the Minister’s reply to the debate. I have three brief points to make. We are moving on to the community right to challenge, and some of us have found it quite difficult to understand how it will work and how some of the problems which might result will be overcome. I thank the Bill team for their time and patience in explaining exactly how they see it working and being fairly honest about some of the difficulties which might exist. This is a difficult part of the Bill and it is one which, when it is enacted, as no doubt it will be, will need a careful eye kept on it. I cannot say that we have not had an immense amount of co-operation in trying to thrash it out.

I very much support Amendments 197B and 197E to 197G on the timing issues. Those are clearly a result of responding to the public consultation, but also to the discussions in Committee. I do not share the worries of the noble Lord, Lord Lucas, about the timing issues. The way in which the timing issues are now presented in the Bill is much better and leaves a great deal of initiative to local authorities. It is much better than the existing wording which leaves it all to the Secretary of State to lay down rules and regulations. I wish that the Government had been more flexible on similar matters in the 100 or so areas in the Bill that we can point to as giving excessive powers to the Secretary of State. In this instance, the Government have listened and we welcome that.

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[Lord Shutt of Greetland]

I thank noble Lords who have contributed to the debate. I am able to say to the noble Lord, Lord Lucas, that we are requiring local authorities to publish the timescales, so that if there were hideous timescales they would be shown up. I cannot imagine that they would endeavour to publish timescales which looked as though they were totally impossible for people to cope with. As a matter of public law, they must act reasonably. We have to bear that in mind and I hope that gives the noble Lord some comfort.

I understand the concerns of my noble friend Lord Greaves. I know how much hard work he has put into trying to understand the issues in this area. I shall write to the noble Lord, Lord Beecham, if I am wrong, but I believe it is quite right that a parish should be in a position to exercise the right. I believe that if one were able to challenge areas of government, local authorities could then become relevant. I may have to write to him to clarify that, but that was my belief when I heard people speak on that area, although it may be that some tidying up is required. I trust that noble Lords will be able to accept these amendments.

[Lord Greaves]

Before the Minister sits down, and without wishing to pre-empt the noble Lord, Lord Beecham, is that an indication that there might be some tidying up to be done at Third Reading, and that that issue therefore could be considered then?

[Lord Shutt of Greetland]

If we can do this by writing a letter and giving comfort in that way, it will be done that way. If, ultimately, it really were needed, we would indeed have to come back to it at Third Reading.

Amendment 197B agreed.

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[Lord True]

There is nothing to say that this deals with a large organisation—some of the things that we are discussing at the moment are relatively small. It seems inconceivable to me that two employees would act against the wishes of those people that they actually want to work with in the future. For years the noble Lord endured the policy of his party being made by small, powerful executives purporting to speak in the names of millions of people—for all we know, they probably still do. I do not see any reason why a group of workers or employees should not get together and entrust their negotiations about an expression of interest to two or three of their number. I think that we should be extremely careful in framing this Bill not to put forward regulation that makes employee initiative more difficult.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have contributed. The noble Lord, Lord Greaves, introduced the debate and then strolled off into the area covered by my notes for the next section, so I will trespass into them and see whether that works.

Before I respond in general I will deal with the matters raised by the noble Lord, Lord Lucas, because I am aware that he was not particularly comforted on the last occasion that I responded to him. I hope that he will be now, because if he looks at Clause 74, he will see that it is headed, “Provision of advice and assistance”. I will not say that it is littered with the words “Secretary of State”, but they are there half a dozen times, which suggests that the Secretary of State may well give advice and assistance to those who want to be involved in the challenge. I understand that the department’s view is that the clause would be used to give help and advice to various organisations that may be far better able to tackle the challenge.

[Lord Lucas]

My Lords will my noble friend clarify whether that would be the case when the Secretary of State was being challenged under the amendments made earlier by my noble friend?

[Lord Shutt of Greetland]

That is a little further down the road, is it not? If the clause states that that advice is being given, then that advice is being given. Therefore, if the Secretary of State is directly giving a service that is ultimately challenged, I would have thought that that had to be, quite frankly. However, that is a little further down the road and it will not happen tomorrow. Nevertheless, it is there that advice can be given and I hope that that will be helpful to my noble friend.

I will look at these notes and respond accordingly. Amendment 197CA would remove relevant authority employees as a relevant body, meaning that they would be unable to express an interest in running a relevant service. The coalition programme for government committed to empowering public sector staff to take control of their own services in new enterprises such as mutuals. That was reinforced in the recent publication of the Open Public Services White Paper. The Cabinet Office is leading on implementing this commitment by introducing a new right to provide. The inclusion of employees of the relevant authority as relevant bodies under the right to challenge will implement the right to provide in relation to local authority services.

To accept this amendment would be a great shame. Employees are often best placed to see how services could be improved and their ideas could make a huge difference in delivering more efficient, effective and responsive services. The amendment could prevent those good ideas from seeing the light of day by forcing employees to organise themselves as a charity, voluntary or community body simply in order to express an interest. Employees may not be prepared to be in a position to undertake such a process before an expression of interest has even been accepted, although of course they will have to comply with the requirements for what must be in an expression of interest.

In addition, this could create a parallel process with employees putting their ideas to local authorities outside the procedure set out in the right. This would risk jeopardising the transparency of the process: proposals should be evaluated consistently whether they originate from existing employees, a parish council or a voluntary or community body.

It is worth noting that in the policy statement, the Community Right to Challenge, which was made available in the House Library on 8 September, we make it clear that safeguards will be in place to prevent the kind of abuse of the right that is concerning some noble Lords. For example, the policy statement states our intention to provide that expressions of interest will have to set out the relevant body’s case that they are capable of providing the service and of competing in a procurement exercise. That will work to ensure that only employees serious about running a service express an interest in running it and should discourage any abuse of the right. In addition, employees submitting an expression of interest will need to set out how they propose to engage with staff affected by the expression of interest in the development of their proposal.

Amendment 197CB, tabled by the noble Lord, Lord Beecham, deals with employee support for challenges. I understand that the intention behind the amendment is to apply a condition to Clause 69(5)(e) that employees must first obtain the support of a majority of employees affected by their expression of interest before they can be considered a relevant body. The policy statement I referred to previously also set out our intention to require employees to set out in their expression of interest their proposals for staff engagement. However, we do not want to be prescriptive about how this is to be achieved. It is best decided locally rather than centrally. The experience of the way the right to request has worked in the National Health Service shows that existing, well established communication channels are likely to play an important part in engaging staff. There is no requirement for a ballot to demonstrate staff support for a proposal under the right to request. However, the face-to-face meetings, intranet updates and staff clinics undertaken when some 1,200 staff from the Hull primary care trust used the right to transfer to a social enterprise show that good communication between the staff involved is likely to be at the heart of any successful challenge.

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[Lord Kennedy of Southwark]

I shall be brief. The amendment moved by the noble Lord, Lord Greaves, raises important concerns. The other amendments in the group seek a process to deal with these concerns. Without these amendments or something else, it is all rather open to interpretation, which is not a good place for us to be. I agree with the comments of the noble Baroness, Lady Hamwee, about the sense of unease.

The amendments in the names of the noble Lords, Lord Greaves and Lord Tope, and my noble friend Lord Beecham, are absolutely right. They make provision for a consultation process with the users of a service, their representatives and residents of the area. If the noble Lord, Lord Shutt, is unable to accept these amendments, will he tell the House when he responds how he squares that with his previous remarks about localism? I genuinely feel that the Bill is confused. In some cases it gives power to the local community, in some cases it takes it back. There is a lot of regulation. It is all a bit confused here. I would be grateful if the noble Lord could address that point in particular.

[Lord Shutt of Greetland]

I thank the noble Lords who have spoken to this set of amendments. I have notes on these amendments and will do my best to deal with them. Frankly, I am not certain that there is an absolute assurance, but let us see how we go with these amendments.

Amendment 197EZA would give the Secretary of State a power to specify in regulations a service value threshold above which an expression of interest may be rejected. It further provides that this threshold will be set at or above the level at which a full, open tendering process is required to take place by any Act or regulations. I understand that the intention here is to focus the right on those contracts where it is perceived that community groups might have a greater advantage in the procurement process. However, it is worth being clear that while only contracts valued at more than £156,000 must currently comply fully with processes set out in the public procurement regulations, procurement below this level will still be subject to requirements of openness, transparency, freedom to provide services and non-discrimination.

Furthermore, it is not right to limit the range of services open to challenge in this way. It is not true that the voluntary sector delivers only small-value services. The right ensures that good ideas for improving any services get a fair hearing and gives those groups the opportunity to go for it. A threshold that prevents consideration of ideas for better or more innovative delivery of higher-cost service contracts seems unnecessary, given the safeguards that I have already mentioned, and a shame.

This amendment also risks discouraging growth and partnership. For example, a consortium of Holy Cross Centre Trust, Mind and Camden Volunteer Centre won a £2 million contract to deliver mental health daycare services. Would this consortium not be able to challenge? Or take the example of Hackney Community Trust, which started off as a small social enterprise delivering local community transport and has expanded into a highly successful social enterprise. At what point would we say “Sorry, you have grown too much, so your ideas no longer deserve a fair hearing”?

Finally, it could also limit opportunities for larger charities and communities of interest to challenge for higher value services. Nobody would argue, for example, that Age UK does not represent the interests of older people. Yet if Age UK wanted to challenge to deliver the meals on wheels service alongside other services in a large authority area, this amendment could prevent it from doing so. It would be inflexible to set a threshold for service value above which an expression of interest could be rejected, and we would not want to reduce the scope of services that could be challenged.

Amendments 197EA and 197EB would enable relevant authorities to carry out a service review instead of a procurement exercise following the acceptance of an expression of interest. Amendments 197EC and 197ED would require relevant authorities to consult widely in carrying out such a review. We have introduced the community right to challenge to ensure relevant bodies with good ideas for how they can deliver services differently or better get a fair hearing and a chance to compete to run the service. These amendments would put at risk both of these aims.

It is unclear what a service review would constitute under these amendments, and the authority would not be compelled to take any action as a result. Many of you will have received the briefing from 10 leading voluntary and community sector groups, including ACEVO, NCVO, NAVCA and Locality, which states:

“Giving local authorities the choice whether or not to respond to an Expression of Interest with a procurement exercise would negate the right to challenge entirely, by effectively allowing local authorities to ignore Expressions of Interest”.

We are supportive of authorities reviewing their services and consulting widely as part of that activity. This is what good authorities will be doing regularly anyway. But that should not detract from or obstruct these important new rights for communities and I do not agree that they should be watered down in this way.

Having said that, if a local authority and any groups that had submitted an expression of interest can agree together that a service review is the most appropriate course of action, there is nothing to stop those groups withdrawing their formal interest and working with the authority to conduct such an exercise. Leaving the power in the hands of the community group ensures that the right is protected but gives the flexibility—where there is a good and proactive local authority—that noble Lords are requesting.

Amendments 197EC and 197ED impose an onerous duty and go beyond, for example, the best value duty consultation requirement, where the duty is to consult representatives of people who may be affected. Contacting every individual resident and service user would constitute a significant new burden. Again, good authorities already engage a wide range of service users and their representative groups as part of the commissioning and engagement process, and should be designing and commissioning services that best meet the needs of their communities.

Amendment 197FA seeks to enable relevant authorities, when assessing bids in a procurement exercise, to apply any criteria they consider appropriate relating to how they might promote or improve the social, economic or environmental well-being of their area as a result of the procurement. This amendment is unnecessary as it is already possible for relevant authorities to apply such criteria within the limits of procurement law. Any criteria applied beyond these limitations could be unlawful and subject to legal challenge.

Amendment 197FAA would require relevant authorities carrying out a procurement exercise following the acceptance of an expression of interest to consider,

“whether it would be appropriate to include particular restrictions on or requirements of persons bidding in response to the exercise”.

I can reassure noble Lords that this amendment is not necessary to ensure that a local authority can control the identity of the service contractor to which it lets the contract during the life of that contract. It is already standard practice for public contracts to contain a term that any purported transfer by the service contractor of its performance of the contract to another person will lead to termination of the contract.

Local authorities will want to retain control over the identity of the person providing services and will already do that in their service contracts. Even if that were not the case, EU procurement law is strict about a change of identity of the contractor. The substitution of a new contractual partner for the one to which the contracting authority initially awarded the contract could be regarded as a change to an essential term of the public contract in question. This could trigger a new procurement exercise.

We have not sought in these provisions to tell relevant authorities how they should design contracts, and nor should we. We have heard many times in these debates that we should be less prescriptive in what we ask of authorities, while ensuring power is really pushed down to communities. A local authority may already impose restrictions or conditions that apply to all persons bidding, as long as such restrictions or conditions are lawful and do not discriminate between bidders. Any attempt by a local authority commissioning a service to impose conditions or restrictions on some but not all persons bidding in the procurement exercise would risk being unlawful as being discriminatory.

I hope that noble Lords will feel able to withdraw their amendments. Yet, I understand the concerns that many noble Lords have about the Trojan horse issue—whether employees, a charity or someone else is challenging just with the idea of someone else coming in on the exercise. Clearly, all that has been proposed is a community right, and it is all about communities. The question comes when the community has challenged—I suspect that the community will have done that because of dissatisfaction—and the authority then says, “Well, we had better have a procurement exercise”. Certainly, if that exercise is beyond the EU figures there is no question that the exercise will be open. People will have put work in, as will have the community bodies and so forth. However, I do not see circumstances in which that procurement exercise can somehow be limited, because that would be outside the law of the land because of our involvement with the European Community. We must be careful not to kid ourselves about that.

However, having said that, everything in these proposals is about the community’s right. In my view, the community would be exercising that right because it thinks that it can do things better and that the service that it is getting would be better in the future than it received in the past.

[Lord Kennedy of Southwark]

I am pleased that the noble Lord understood the concerns raised on this important group of amendments, spoken to by the noble Lord, Lord Greaves. Is there nothing that the Minister can offer us in terms of looking at this further? Perhaps he may agree to consult with colleagues and come back at Third Reading.

[Lord Shutt of Greetland]

What I will say is this: I have been giving some thoughts regarding guidance, to which there has been reference all along. Guidance will be given and notes will be available from the department, but there may be circumstances where that guidance will be, “This is something on which you make your own mind up”. I am sure that the department will cull the debate and look at where offers ought to be made. Certainly, if guidance is required, guidance will be given. However, there will be instances where, because we are talking about localism, local people and people on local authorities will be making their own minds up.

[Lord Kennedy of Southwark]

Before the noble Lord sits down, can I ask whether there is any possibility of guidance being available by Third Reading, even in draft?

[Lord Shutt of Greetland]

It is extremely unlikely that the noble Lord will get it as quickly as that, but I believe that it will be available before 31 March.

[Lord Greaves]

Before my noble friend sits down and before I stand up, perhaps I may ask a question which has just occurred to me. If a service—for example, the refuse and recycling service—goes out to a contract and it is for well over £156,000, will an existing in-house provider be able to take part in that tendering exercise and compete against outside contractors in exactly the same way as it would under the old compulsory competitive tendering system or under the system in which councils sometimes put out a contract to test the market against their own in-house provision? Under the community right to challenge, if a contract goes out to tender like that, will the in-house provider still be allowed to take part in the exercise or will it be doomed?

[Lord Shutt of Greetland]

I may need to think about that and write to my noble friend. However, it seems to me that the in-house provider here could be the “two or more employees”. Those in-house people whom my noble friend speaks of would be the group of workers. That is how I think it would be done but, if I am wrong about that, I shall let him know. It seems to me that that is how the challenge would be used. However, if my noble friend is talking about procurement and there is an existing body, I do not see any circumstances in which that existing body will not be able to participate in the procurement exercise. I hope that that is helpful.

[Lord Greaves]

My Lords, I am grateful for that. I realise that my noble friend has not had a chance to think about that question but I think that the issue of “two or more employees” is totally irrelevant in this case. We are talking about a challenge made by an outside body or organisation. The contract is put out to general tender and there is not a two-person or six-person challenge from inside the organisation. There is an existing department full of staff who are currently working for the council and who may or may not be able to take part in the competitive tendering exercise. The more I think about this, the more it seems to be a crucial point, and it would be very helpful if the Minister could come back to us on it. This is a very new point and perhaps some clarification of it at Third Reading, if only to put the Government’s view on it on the record, would be extremely helpful. I hope that that will happen.

There are times when I listen to Ministers reading out their briefing when I think, “If that is the best they can do, I must be on to a good point”. The attempt to rubbish my amendment concerning a service review by suggesting that it would involve consulting every single resident, which would not be possible, was really rather derisory. I do not blame my noble friend for that; he has his briefing to read out. Councils and other bodies consult users of services all the time and they know how to do it. It is not difficult and you do not have to be absolutely certain that you have consulted every single resident. You put out a consultation by whatever means are reasonable. It might be through the internet, leaflets, articles in local newspapers or whatever. Therefore, I thought that that response was a bit pathetic.

The Trojan horse argument is important but the real problem arises when that Trojan horse is accidental. If you get a community that is really keen on taking over a service and it has real local support but the contract has to go out to tender and the community cannot possibly match what an outside commercial organisation can provide in terms of cost, then that community is not going to be very pleased. It is going to say, “We challenged and these people from outside who have come in to make a profit have stolen our services away from us”. They might well have preferred the service to stay with the council rather than for that to happen. That kind of scenario will simply lose public support. It is not about rights for communities, it is about communities potentially being set up to provide rights for the commercial challenges from outside. The advice to councils is going to be absolutely vital. It has got to be clear, it has got to be strong and it has got to provide councils with all the safeguards they need—not to stop communities challenging and taking services over—but to stop it being abused.

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[Baroness Hamwee]

I shall not speak at much length. This amendment was tabled at the last stage as well. It would provide for a relevant authority being able to require whatever information it thinks desirable. I dare say my noble friend will confirm that it is not necessary to state this because it is implicit or provided for elsewhere. The reason I am moving it is because I want to quickly comment on some of the things he said in response to the last group. As it was Report stage I could not come back on them then. He said, “It’s all about community”. But what my noble friend and I are saying is that we fear that it is not. I very much welcomed his comment that guidance might well say, “Make your own minds up”. That is exactly what one would want to see. But I wonder if I could suggest to him that guidance might include some sort of flow chart which would assist authorities to understand what they can do and what they cannot do, and what direction they have got to be thinking in. I also say that my noble friend Lord Greaves’s point about how a procurement exercise allows for a tender from the authority—from the in-house service—is very serious. It may be one of those things where the answer is so obvious that none of us can see it because it is blindingly obvious. If it is not obvious, and if it is not answered in a way in which the Minister will understand we would regard as satisfactory, then it is so serious that we must not lose sight of it. We should not discard it now and we should return to it at Third Reading to ensure that it is entirely clear. I hope that will not be necessary. I beg to move.

[Lord Shutt of Greetland]

These matters are grouped together. I thank the noble Baroness. There are four amendments in the group and two have not been moved. This is the third one and I take it that the fourth will not be moved. On that basis I respond to my noble friend Lady Hamwee.

Amendment 197FC would enable a relevant authority to ask a relevant body for any information it considered desirable in deciding whether to accept or reject an expression of interest. The amendment is unnecessary. Clause 69(1) already enables the Secretary of State to specify in regulations the information to be included in an expression of interest. The majority of respondents to the consultation broadly agreed with our proposals on this and the policy statement placed in the Library of the House sets out the information we intend to specify be included in an expression of interest. This information will enable the authority to decide whether there is one or more grounds for rejection. If expressions of interest do not include any of the required information, we would expect relevant authorities to take a common-sense approach and simply ask for it.

This amendment would enable authorities to place additional requirements, and potentially a disproportionate burden, on relevant bodies, and treat expressions of interest from different relevant bodies differently, which would be unfair and could potentially leave authorities open to challenge. If the experience of implementing the community right to challenge shows that a relevant body may need to provide further information to enable authorities to take a decision on an expression of interest, then we can consider whether we need to amend the regulations to allow for this.

In the circumstances, I trust that my noble friend will feel she does not need to press this amendment. Following her other comments about guidance, I am sure that the resources of the department will provide guidance, flow charts and material in any form that clearly gets over to authorities the information that they need. As I have indicated all along, I believe that all these proposals are right, but, in the event, it is about trust and it is about communities; it is not about exposing big contracts to organisations under the umbrella of something which has been done for communities. I trust that everyone has got that trust and that it will work in this way.

[Baroness Hamwee]

I thank my noble friend for that response. Of course, I shall not press the matter, but I note that he talked in terms of the Secretary of State making regulations which will allow for certain information to be requested. I am looking for a little more individuality than that. However, I shall use this opportunity to add a coda to my point about the in-house service and procurement. I am not asking for an answer now, but I shall put the question on record. In order to take part in it, would the in-house service have to form a separate, new entity in order to be able to bid? That would seem to involve a lot of extra bureaucracy and work, which I do not think any of us would want to see. I shall put my noble friend out of his agony and beg leave to withdraw the amendment.