Local Audit (Public Access to Documents) Bill

Marcus Jones Excerpts

2nd reading: House of Commons
Friday 25th November 2016 Commons Chamber

[Simon Hoare]

My hon. Friend is clearly exploring the opportunity for another career; I will leave it to the House to consider what it might be.

This important Bill is required because, as was said when we discussed Lords amendments to the Investigatory Powers Bill and section 40 of the Crime and Courts Act 2013 on freedom of the press and Leveson, we are seeing a big diminution in local and regional media, and that is having a significant and damaging effect on how information is shared nationally. The days when the local newspaper reporter, with his or her pad and pencil, attended the finance committee, full council, cabinet or the planning or housing committee have, regrettably, gone. It is now often the case that one journalist covers a very large geographical area, and that is not restricted to rural areas; it is also a phenomenon in town and cities.

My own part of the world, North Dorset, does not have a daily or weekly newspaper. We have the most excellent publication, Blackmore Vale Magazine, and Valley News. The first is weekly, the second monthly. Those free publications are available to the subjects of North Dorset—if you live by the sword, you have to die by the sword when you make those sorts of remarks—and they are excellent. That is how people get news, but they do not have the staff or the journalists to cover district or council meetings.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

My hon. Friend has hit the nail on the head. If the journalist behind a small publication lived in Poole in Dorset, that person—or subject, as my hon. Friend puts it—would not be able to get the information under discussion. He is showing why the Bill is so important.

[Simon Hoare]

My hon. Friend demonstrates his perspicacity, and that is why he is a Minister of the Crown and I am not. He gets my point entirely. A vacuum is being created and it needs to be filled, if for no other reason than democratic accountability.

In all seriousness, we need to consider a couple of caveats, if and as the Bill proceeds, which I hope it will. When the Freedom of Information Act went through this place, it was said that it would not represent a financial burden to local authorities, but it has and it does. We have to consider the Bill against the backdrop of a prevailing picture of a change in local authority funding and a reduction in the direct grant, as we continue to hoover and shovel up the mess left by the Labour party at the end of its period in office.

We also have to take into account the fact that there has been—I welcomed this when I was a local authority member and championed it hugely—an enormous local government reorganisation of shared and combined services. It is also the case—I am sure that this will resonate with the hon. Member for Oldham West and Royton, given his experience of local government—that there are far fewer local authority officers who are able to deal with requests from the public. Moreover, local government reorganisation—this is certainly the case with my own council in Dorset—will involve unravelling, over probably the next three to 10 years, the financial meshings and harmonisations of council taxes.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

It is a pleasure to speak in favour of this extremely important private Member’s Bill brought to the House by my hon. Friend the Member for Aldridge-Brownhills (Wendy Morton).

The Government believe that the issue is worthy of our support. The clear intention to legislate on this issue goes back to December 2014 in the then Conservative-led coalition Government’s response to the consultation exercise on secondary legislation implementing the new local audit regime. I would like to quote the exact wording used in paragraph 4.11 of that response:

“Government believes that journalists should also be able to inspect accounts and information, in the interests of local people, and therefore intends to legislate at the earliest opportunity to ensure that the definition of ‘persons interested’ (see section 26 of the 2014 Act) is wide enough to enable this”

[Charlie Elphicke]

The Minister is making a typically polished and erudite speech from the Dispatch Box, but there is one thing that troubles me about this measure. What exactly will it cover that is not already covered by measures in the Freedom of Information Act 2000? I can make a freedom of information request about a council’s accounts and obtain the information anyway. Will he help me and other hon. Members to understand how all this works?

[Mr Jones]

As ever, my hon. Friend makes an extremely pertinent point, which I will come on to. The Bill will be an important aid in the fight to improve local transparency and accountability by amending section 26 of the Local Audit and Accountability Act 2014. Journalists, including citizen journalists, will be afforded the same rights as “persons interested”. They will be enabled, for 30 days, to inspect the accounting records of the financial year just ended of any relevant authority and request copies of these documents.

Hon. Members might wonder how such a small change could improve local transparency and accountability, and about the potential associated costs—both points were raised by several hon. Friends. I hope that I can reassure the House on both. On the first, by giving journalists the right to access recent accounting information from a range of local public bodies, the Bill will assist them in their investigations, and publication of their findings could alert local taxpayers to poor spending decisions. As a result, local electors might wish to seek information from the auditor or object to the accounts, thus enabling the auditor to investigate. The measure could therefore increase town hall transparency and accountability.

On the costs, we are not introducing a new right, but extending an existing one to include journalists. Furthermore, the timeframe for these requests is limited to a month in each year, and the body concerned can recover the costs of providing any copies from the requester. The Bill will enable journalists only to examine the documents and seek copies; they will not be able to question the auditor or make objections. Those rights could still only be exercised by local electors, as is the case now.

[Oliver Colvile]

Would it not help if local authorities were much more proactive in revealing information, rather than people having to depend on FOI requests or journalists picking up the phone? If local authorities could be much more aggressively transparent, it would be incredibly helpful.

[Mr Jones]

My hon. Friend makes a good point. It is often easy to forget that some local authorities are extremely good, have high-quality members and officers, are open and transparent and offer up the type of information to which he alludes. That said, others are not so transparent and open. It would be great if they could all follow the examples of best practice to which he refers, but that is regrettably not always the case, which is why we support the Bill.

[Seema Kennedy]

My only hesitation concerns the role of the auditor. Might another burden put off some auditors and thereby call their role into question? I am sure that will be teased out in Committee.

[Mr Jones]

My hon. Friend makes a good point. I can reassure her that the role of the auditor will not change. The current situation is that local electors can make requests of the auditor for further information and objections to the audit, but those who are not electors in that area cannot.

[Craig Whittaker]

While we welcome the extension to include journalists, might not the Government—in the interests of honesty, openness and accountability—consider in Committee opening things up completely, well beyond the intention of the Bill, so that anybody can access this information?

[Mr Jones]

I hear what my hon. Friend says, and I shall come on to that point a little later and explain why the balance is right.

To return to the issue of costs, it is our view that only a relatively small group of journalists or bloggers might wish to take advantage of the new rights. We recognise the potential for increased costs if a journalist running a national campaign asked for particular information from a raft of local authorities on issues such as salaries in local authorities or the cost of refurbishment. I suggest that that might not necessarily be a bad thing.

[Antoinette Sandbach]

rose—

[Mr Jones]

I shall make some progress, if I may.

This provision might make local public bodies think more carefully about high levels of expenditure on certain items and how it might look to the general public during periods of financial constraint and reduced public spending.

I should also point out that the 2014 Act includes an explicit power for auditors to refuse to consider vexatious objections, and even if several electors were to ask the same question or make the same objection, the auditor need undertake only one investigation, although a reply to each individual with the outcome might be necessary. The auditor is able to recover any reasonable costs of carrying out this work from the authority concerned. However, if the work results in increased costs, it could be argued that that might cause the authority to consider its future expenditure more carefully.

[Charlie Elphicke]

rose—

[Mr Jones]

I shall give way once more.

[Charlie Elphicke]

The Minister is making a passionate speech and is being so generous in taking interventions. I want to push him a bit harder on one aspect. Under this measure, journalists cannot raise objections or question the auditor. I used to sit on Lambeth Council in the days when it was called “loonyland” and was as bent as a corkscrew. Will the Minister reconsider whether, in such cases, journalists should be able to question the auditor and press him a bit harder, because if that had happened, things might not have come to such a pass in the London Borough of Lambeth as they did under old Red Ted Knight?

[Mr Jones]

I thank my hon. Friend. The overarching objective here is to enable a journalist who might not be an elector in a particular area to uncover that sort of information and bring it to the public’s attention, so that the public can then question the auditor. There are a number of examples of where that has happened to positive effect, with changes having to be made by a local authority as a result.

The overarching objective of external public audit must be the proper use of public money, and if an elector objects and it results in investigations by the auditor, he is doing his job and any resulting delay in completion of the audit or additional cost to the body must be seen as a secondary consideration.

[Jim McMahon]

Will the Minister give way?

[Mr Jones]

I apologise, but I will not because I want to make sufficient progress so that the Bill receives its Second Reading.

It might be helpful here to illustrate the difference between this provision and the powers provided by the Freedom of Information Act 2000, which my hon. Friend the Member for Dover (Charlie Elphicke) mentioned. The ability to inspect and make copies of the most recent accounting information from a local authority during a specific period could provide compelling and timely evidence of poor spending decisions in the last accounting period that would enable a journalist to bring them to the attention of local electors by publishing the evidence uncovered. That would provide electors with the opportunity to ask the auditor about the issue or raise an objection so that the auditor can investigate the matter further, and it would potentially enable action to be taken to investigate poor spending, potential fraud or maladministration within a local public body. FOI requests, while being subject to timing constraints in terms of providing a response, do not have the same capability for potentially engendering swift action that could have the effect of stopping illegal activity.

As we heard from my hon. Friend the Member for Aldridge-Brownhills, the smallest parish councils—those with an annual turnover of £25,000 or less—will not be subject to the Bill, because they are subject to separate provisions under the 2014 Act. They must follow a different transparency code, which we believe works for them.

I know that some stakeholders have expressed reservations about the value of the Bill, and about whether the potential costs will outweigh the benefits, but I firmly believe that enabling journalists to inspect the accounting records of a range of local authorities could uncover more poor spending decisions by councils, which in turn would lead to more potential objections from electors. Although the existing rights are not often exercised, this kind of transparency has, in the past, enabled illegal activity and poor governance in local authorities to be uncovered. My hon. Friend the Member for Dover gave a good example involving failings on the part of a local authority, but there are other examples. In the event of poor decision making and maladministration in councils, it is entirely reasonable for local electors to be able to obtain information and shine a light on what is going on. They may not be financial experts, but the Bill will add another tool to the box, and enable them to hold their local authorities to account.

I stress that the timescale for action would be limited, and that the window of opportunity, and thus the additional cost that Members have mentioned, would be restricted to the 30-day period in which the previous year’s accounts would be available and the inspection rights could be exercised. Any questions or objections would also have to be received within that period to enable an investigation to take place.

The measures in the Bill are proportionate and they could help to uncover poor practice so that people could hold their local councils to account. I am delighted to be able to support the Bill, and I am grateful to my hon. Friend the Member for Aldridge-Brownhills for introducing it.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).