Police Reform and Social Responsibility Bill

Lord Wallace of Saltaire Excerpts

Monday 11th July 2011 Lords Chamber

[Lord Shipley]

My Lords, parallel to our discussions on this Bill, the Localism Bill is in Committee. In that, there has been discussion both on a code of conduct and on the need for a standards committee. There has been discussion around whether the code of conduct should be voluntary or statutory—there is a strong view, I think, in your Lordships' House that it should be the latter. On standards committees, which are likely to be abolished under the Bill, I also detected in your Lordships' House strong support for each local council having such a committee.

Irrespective of that, there are two major issues of principle here. The first is the role of audit, which, it is important to bear in mind, is not the same as scrutiny and which has statutory force in local government. The second is that audit should be independently led. The powers currently given to the panels are insufficient to deliver those two principles.

Audit is not just about finance; it is also about a whole range of matters including procurement policy, contracting, managing very large budgets, procedures being followed, human resources policies and equal opportunities. An amendment is being made here which I hope the Government might find helpful. It proposes that audit be fundamental part of the checks and balances we need in relation to a police and crime commissioner. Subsection (1) of the proposed new clause is right in stating that every police and crime panel should deal with complaints and conduct matters, monitor the discharge of the police and crime commissioner’s functions and monitor the accounts and audit matters of the relevant police commission, police and crime commissioner and chief constable as the case may be.

The question is whether that task should be undertaken simply by the panel or whether a slightly different structure is needed. I think that a different structure is needed, because audit is an important issue when public money is being looked after. There should be two sub-committees—I refer here to subsection (2) of the proposed new clause—one of which looks specifically at audit and the other at conduct and complaints.

The proposal in Amendment 117 relates to the nature of the independence of the sub-committee. To have someone who is independent and appointed according to Nolan principles chair that sub-committee is important. To have then at least three other independent people, balanced by up to three panel members, means that the public would gain confidence in that structure because they would see that there were more independent members than members of the panel.

At the heart of the problem is the fact that no governance structure lies underneath an elected police and crime commissioner. In other words, there is a perception in the Bill if you simply have direct election of a commissioner there is legitimacy in that. Well, of course there is, but one has to have checks and balances—which the coalition agreement has identified and said have to be strict. Having a clear audit function which is publicly accountable is a matter of fundamental importance; otherwise, those checks and balances cannot be properly delivered.

[Lord Wallace of Saltaire]

My Lords, I thank the noble Baroness, Lady Henig, for her very detailed amendment and for the care and attention which she has given to this important area of checks and balances. She offers in effect an alternative model to that offered in Clause 32 and Schedule 7 and wishes to replace Schedule 7 with this lengthy and detailed amendment. Schedule 7 sets out that regulations subject to affirmative resolution will be brought to this House to set up a model that is not fundamentally different from what the noble Baroness is proposing, but in which we see the police and crime panel as the body which provides the checks and balances to the police and crime commissioner. To that end, the police and crime panel would set up its own committees, which would be part of the process through which the ongoing process of scrutiny is attended. Schedule 7 talks precisely about that level of complaints which goes underneath criminal activity; that is, inappropriate behaviour, referred to in Clause 32 and Schedule 7 as “conduct matters”. Schedule 7 states specifically that the police and crime panel will deal with conduct matters which are below the level of criminality.

The amendment would expand the panel's role as a scrutiny body, but presents an alternative model. We have set out in the Bill a framework which addresses the conduct of commissioners, including complaints against them. We have been careful also to read across—I say this to the noble Lord, Lord Shipley—to the Localism Bill and the changes made there. We are doing our best to balance out some of the problems that we have been left with from the previous regime which arose from the Standards Board for England being exploited by some political parties against their opponents. We stress throughout the Bill that all those involved in the management and scrutiny of policing are subject to the Nolan principles on conduct in public life.

The noble Lord, Lord Shipley, talked about the importance of audit and the extent to which the audit function is allied to but separate from the ongoing process of scrutiny. The police and crime panel will receive audit reports and will be designated as such for the purposes of the Audit Commission Act. The police and crime panel will thus hold to account the police and crime commissioner for the group audit of the police and crime commissioner and the chief constable. The police and crime commissioner will hold the chief constable to account for their audit. It will be entirely appropriate for the police and crime commissioner to form an audit committee, if he or she wishes to do so, in order to monitor the chief constable’s fulfilment of that purpose. The police and crime panel, or a committee of the police and crime panel, will act as an audit committee for the PCC. The detail of the PCC complaints regime will be in regulations. It is not in the Bill, as Schedule 7 sets out. Regulations will state that complaints not involving criminal allegations will be resolved by the PCP. This is the appropriate-level approach that I suggest the noble Baroness, Lady Henig, is asking for. We are already providing for police and crime panels to be able to require the attendance of the PCC, or members of its staff, in order to answer questions.

The PCP will have a role in referring allegations to the Independent Police Complaints Commission, and in receiving reports from the IPCC. Where the IPCC determines that there are reasonable grounds for an investigation to be established, the PCP shall receive a report of that investigation once it has been concluded. The government amendments, which are intended to address criticisms made of the Government’s preferred model, will mean that any criminal allegations against the mayor, the deputy mayor for policing and crime and the deputy PCC would be the subject of scrutiny by the IPCC. I apologise for the acronyms.

In the case of the mayor, criminal allegations would be the subject of scrutiny by the IPCC whether or not the allegation was connected to his or her role as the Mayor’s Office for Policing and Crime. Where a complaint against the mayor, or against a deputy mayor for policing and crime who is an Assembly Member, is not serious enough to require investigation by or under the management of the IPCC, the regulations will provide for it to be dealt with under the local government standards legislation that is applicable to the mayor and Members of the Assembly. Subject to the will of Parliament, that legislation will be amended by the Localism Bill, with which a number of the noble Lords taking part in these discussions are at present engaged.

We accept that removing the reference to “other corrupt behaviour” would achieve greater clarity without significantly reducing the scope of the provisions. Behaviour that could be regarded as corrupt is highly likely to involve the commission of some criminal offence in any event. Any complaints or allegations which fall below this test will be left for the police and crime panel, or for a committee of the police and crime panel, to handle. The mechanism for these complaints will also be set out in the regulations. These regulations will be subject to the affirmative resolution procedure, and noble Lords will therefore have the opportunity of debating the finer detail of these procedures when they are introduced to the House. I hope that that provides some assurance to the noble Baroness, Lady Henig, and will persuade her to accept and support government Amendments 151, 152, 153 and so on.

[Baroness Hamwee]

Will the Minister confirm that the proposed arrangements for audit will be voluntary, in that a commissioner may set up an audit committee or, by definition, may not? If that is right, will he tell the House who undertakes audit and how any report will be presented to the commissioner? I think he said, fairly early on in his response, that the commissioner could receive audit reports. Who would make that report if an audit committee was not set up? I am sorry if I have bowled him too detailed a question at this point.

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[Lord Wallace of Saltaire]

I thank the noble Baroness for that detailed question. PCCs will have a chief finance officer, with the professional qualifications and the professional obligations of a chief finance officer. If a police and crime commissioner does not choose to have his or her own audit committee, the PCP’s audit functions will play a much more active role in scrutinising what the PCC provides, whether by the whole panel or by its own audit committee. The legal obligations for audit are, I am assured, the same as those for police authorities. However, we are very happy to write in detail on that, and a number of these matters will of course come up when the detailed regulations are put for affirmative resolution before the House.

[Baroness Henig]

My Lords, I have a problem with the response. This is a very big issue about public confidence. It is about putting processes in place that will reassure the public that everything is being done ethically and correctly, and that governance structures meet certain standards. I heard what the noble Lord said. My worry is that some of this is being left to laissez-faire: you can do this or you need not do this; there is a model here that you could follow if you would like to.

These matters are really important. I agree absolutely with the noble Lord, Lord Shipley. Therefore, I do not understand why these serious principles cannot be in the Bill, and why we cannot agree on a way to encapsulate them that meets both what the Government want and what I am asking for. The difference between us is not great.

Serious principles are at stake: for example, the serious principle that audit needs to be carried out and needs to be independently led. I think that we all agree on that. Another principle is that codes of conduct and standards need to be established. Again, they need to be led by an independent committee. A third issue, on which perhaps the Minister feels less strongly than I do, is that low-level complaints should be dealt with first at local level and then escalated; they should not be dealt with by the IPCC and then come down.

[Lord Wallace of Saltaire]

That is precisely what Schedule 7 states.

[Baroness Henig]

I have just been reading Schedule 7. As I said, it has an element of laissez-faire about it. If the Government agree about the issues and believe that they are as important as I believe they are, what is the problem with putting them explicitly in the Bill? I cannot understand what the difference is between what I am asking for and what the Government want. Why will they not accept that these principles are very important and therefore state that they will try their best to put them explicitly in the Bill? I do not understand their hesitation. What am I asking for that is so revolutionary that the Government are resisting it? All I am asking for are the most basic principles of good governance. If the Minister is not able to meet my concerns, I will have to test the opinion of the House, because the issues are fundamental and I do not understand the problem that the Minister is facing. Perhaps he would like to reassure me in another way.

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[Lord Wallace of Saltaire]

I suspect that a great deal of what the noble Baroness is asking for is in regulations under previous legislation, and will be in regulations under this legislation. That is why I fail to see a difficulty. I assure her that we all understand that these are extremely important principles, and that the role of the chief finance officer and of the PCP in looking after the audit will be set out extremely carefully in regulations.

[Baroness Henig]

The problem for me is that this is like justice; it must not only be done but be seen to be done. Not only must we have high standards and regulations, but the public must be convinced, and must see, that they are there and that they are explicit in the Bill. If we care about these things, we must spell them out. I will find it tragic when noble Lords opposite vote against something that they all believe in, but I cannot avoid it. These matters are so important that I wish to test the opinion of the House.