Local Authority Overview and Scrutiny Committees

Rishi Sunak Excerpts

Thursday 17th May 2018 Westminster Hall

[Mr Clive Betts (Sheffield South East) (Lab)]

I beg to move,

That this House has considered the First Report of the Housing, Communities and Local Government Committee, Effectiveness of local authority overview and scrutiny committees, HC 369, and the Government Response, Cm 9569.

It is a pleasure to serve under your chairmanship once again, Mr Sharma. Today’s debate will consider the report of what is now the Housing, Communities and Local Government Committee. At the time it was the Communities and Local Government Committee, but what’s in a name change, after all?

The report looked into the effectiveness of local authority overview and scrutiny committees, which is an important subject. Perhaps it is a bit technical, and does not catch the main headlines in the popular press, but local government delivers important services to our local communities, including social care services for the elderly and children, emptying the bins, sweeping the streets, running libraries, and producing housing. Those are all important services, and it is important that they are done well and that the performance of authorities is scrutinised and monitored effectively.

Let us go back, for those of us who can remember, to how scrutiny came about in local government. We used to have a system—indeed, some councils are going back to it—in which all councillors were involved in the decision-making process, in the sense that they were members of committees. Then we had the idea that the Cabinet system, because it worked so well at national level, should be replicated at local authority level. Cabinets were set up in local government, and a number of councillors were appointed to them. I think someone either in Westminster or Whitehall then had the thought, “What do we do with the rest of the councillors who are not on the cabinet, who now haven’t got committees to be on?”

Councillors perform a very important role as representatives of their local communities. Acting in their wards on behalf of their constituents is key to their role. Then someone thought, “What else can we do with them; they are sitting around the town hall, city hall or county hall with nothing else to do? Scrutiny committees are a good idea—we’ll have those.” I think it was a bit of an afterthought on top of the cabinet system, although people who devised it at the time might say that it was not. Unfortunately, for some authorities, it has remained an afterthought—somewhere we can put to one side those councillors who do not have much to contribute anywhere else or, sometimes, councillors who have too much to say somewhere else and are a bit of a nuisance to the leadership of the council. Those in the leadership put such councillors on a scrutiny committee, and hope that they will go away and do something that does not really affect them.

Unfortunately, some councils see scrutiny as a problem. People can raise difficult issues that should not be raised, and sometimes it can become an issue of party political contention. Opposition councillors get put on scrutiny committees to make the life of the ruling party difficult, and ruling party councillors get put on them and told not to ask any difficult questions, because questions can always be raised in their group meetings afterwards. Councillors tell us that that is what is said to them.

However, there are very good examples of scrutiny; like Select Committees in this House, councillors challenge the executive, take on issues, investigate thoroughly and comprehensively, produce good reports and, rather than simply looking at something after the event, take policy initiatives and help to develop policy. Sometimes when there is a complicated issue—perhaps there is a general understanding in the council of where they want to get to, but not of how to get there—scrutiny committees can be really good at delving down and doing what they call “task and finish” to identify the key issues and technical difficulties, and come to agreed, well thought through conclusions. There are some really good examples of effective scrutiny.

There are good examples of councils going outside their council body and getting witnesses, expert witnesses and advisers in to help them, as Select Committees do. Unfortunately, such examples are rare. When councillors are asked why they do not get people from their local university to come in and help—those experts would probably be quite happy to be part of their local community engagement and democratic process—the response is often, “Oh—can we do that?”

We recommend looking at examples of best practice. Councils should learn from one another, and from the best examples of how to conduct scrutiny independently and effectively, by drawing in advisers from outside and engaging with the public in a meaningful way. Sometimes the way the public are engaged with—sitting at the back of a room while a council officer reads a report that has been written well in advance—is not very good. That does not engage the public, but we are looking at different ways of doing so. Taking scrutiny out to the community, setting up websites, and using social media are ways in which councils can develop and enhance scrutiny, as some of our Select Committees do.

This weekend I am going to Birmingham because the Housing, Communities and Local Government Committee, together with the Health and Social Care Committee, is doing an inquiry into social care. We are going to talk to the citizens’ jury that we have established to provide information and evidence to the inquiry. It is the first time that our Committee has done that. The Committee is also doing an inquiry into the high street. We are using a website to try to get the public engaged in feeding in their information about what is happening in their high street, and what they think should happen. We would like to see such initiatives reflected in local government. Sometimes they are, and local authorities can learn from one another as well.

The key recommendation of our report is about the culture in local government. Do those in the leadership, both politically and at officer level, see scrutiny as important? Do they see it as part of the council’s function, and as something that can add value to council decisions, or just as a bit of an irritant that can be put to one side and forgotten about? That was key to our recommendations. The reality is that if councils value scrutiny and want to make it work, they can do it, even if they may do it slightly differently in different authorities.

I do not want to keep hon. Members for too long this afternoon, but the Committee made a number of specific recommendations. The Committee’s key observation was that Government guidance on scrutiny has not been updated for a long time. The Government have accepted that, and they will produce new guidance—we had a positive discussion with the Minister about that at the evidence session. That is a good starting point, because it means that we can look at some of the other recommendations positively. Scrutiny committees should report not just to executive members of the council, but to the whole council. Again, the Government have accepted that, and we welcome it.

We recommended that scrutiny officers should have the necessary skills to help members of scrutiny committees to do investigations into detailed policy matters. We should not just have a clerk system in which someone says, “We’re here to keep a record of attendance and get the witnesses in the right places.” It should be about helping members with proper monitoring and policy development. The Government have basically accepted that recommendation as well.

Another issue was scrutiny of elected mayors and combined authorities. When any deal is done, it is really important to look at scrutiny, and ensure that resources are available for it. Those mayors and combined authorities are a further step removed, in some cases, from the people who elect them. The arrangements can be complicated, and it is important that there is proper scrutiny of them. The Government have accepted that point as well.

Moving on to issues on which the Government’s response has been less enthusiastic, and those issues that need more consideration, the Government did not accept that a summary of the resources spent on scrutiny should be published each year alongside the summary of resources spent on the executive. The reality is that, in many councils, when cuts are made scrutiny is one of the things that gets cut, because it is a bit of an inconvenience and nobody will miss it if it does not happen. Of course, the executive looks after itself. That does not happen on all councils, but there is sometimes a feeling that that happens, because the executive makes the budget recommendations. We thought that saying to councils, “Look, just publish those figures,” was an interesting way of demonstrating the extent to which they fund scrutiny, compared with other functions of the council. The Government said no to that. It seemed to us a fairly harmless recommendation, and we do not understand why the Government did not support it.

The Committee also said that a statutory scrutiny officer should be appointed in every council. Why not? They exist in unitary authorities and in counties, but not necessarily in second-tier authorities—the district councils—which perform very important functions. Why not a statutory scrutiny officer there as well?

The issue of what information is available to scrutiny committees is absolutely key. Following our report, I have done two or three talks to councillors on scrutiny committees and scrutiny officers. Everyone started nodding at the point we raised the issue of what information is available. So many times councillors on scrutiny committees have been told, “You can’t have that information; it is confidential.” There are examples of councillors having to use freedom of information requests to get information from their own councils. That is ludicrous. It is nonsense. The words “commercial confidentiality” often appear as the explanation and the excuse.

The Government’s response in that regard was an attempt to be helpful. They said that there should not be a blanket refusal to provide information and that information should be dealt with on its own merits. The very helpful point was made—I hope it is given some prominence in guidance to councils—that when contracts are let by councils, clauses should be put in to make it clear that information can be relayed to councillors and not just to a handful of people on the executive. Companies tendering for work should understand that right from the very beginning of the tendering process, before contracts are let. The Government need to build on that in the guidance because it is an absolutely key point—if the information is lacking, scrutiny cannot be done.

In many councils, more and more functions are not delivered in-house but are contracted out to private companies. Officers delivering a service in house can be called before the scrutiny committee, but if the information about a private contract is classed as commercially confidential, the contract cannot be scrutinised and nor can the service to the public. At the end of the day, that is the key point. Addressing that issue is fundamental to getting scrutiny right in an age when so many services are now delivered by third-party contractors. We must make sure not only that the information is available but that those individuals who are running the contract have to come before the scrutiny committees as well.

We also called for scrutiny committees to look at the work of local enterprise partnerships. Billions of pounds of public money is spent by LEPs, which are almost unaccountable to any part of the democratic process. The Government were receptive to the idea and said that there should be proper oversight and transparency of the operation of LEPs. They said that they would go away to think about that and write to the Committee. I know that the post is occasionally slow in this country, but I think the letter has got lost in the post. We have not received it yet. I hope the Minister has one in his pocket this afternoon to hand across the Chamber.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

We are writing it now.

[Mr Betts]

Okay. Clearly, I think it is an important issue. Who else is going to oversee the spending and work of the LEPs if not council scrutiny committees? That is very important.

There is something that somehow got lost altogether in the Government’s response. Currently, councils have a right to oversee their own activities and the officers who perform them, although they need to do more about commercial companies. There is a very good set of rules for the health service. The service can be scrutinised by local council scrutiny committees and the health service bodies have to provide information. Officers have to come to scrutiny committees and be questioned about that. What about the other important public services?

The Department for Work and Pensions provides a lot of services at local level. So do the police. I know that the police have their own scrutiny arrangements for local police panels—I do not know whether they are quite the same—but certainly, lots of public services, such as those delivered by the DWP, are very important at local level. They do things that affect the public locally, but there is currently no local oversight. We suggested that they should be put in a similar position to health service bodies and that officials should have to provide information and evidence and be available to appear before scrutiny committees. The Government seem to have missed that out altogether in their response, as though they were a bit uncomfortable about it. I know that it might mean talking to one or two colleagues in other Departments, but it is a good proposal and one that would help transparency and monitoring of Government activity as well. I hope the Minister will be able to say a bit more about that this afternoon.

We look forward to the Government’s guidance, as well as clarification of the one or two issues that I have identified, including that long-awaited letter, but to a large extent, at the end of the day it is down to councils. We can give them guidance, but we need to encourage them to take account of the report and to work with each other to improve scrutiny.

I know that the Local Government Association is starting to look at the issues. We had a very helpful letter just before the debate from the Centre for Public Scrutiny, which has an important role to play. It gave evidence to the Committee and is now working with the LGA on how to deal with a number of matters in a practical way. They are looking at the issue of councillor training, and at examples of good practice. They are looking at how councils can be helped to understand their responsibilities. I hope that they are going to look at the idea we recommended, which the Government said they were going to talk to the LGA about, of doing some pilots on the election of chairs of scrutiny committees.

Councils are, in the end—the Committee is very clear about this—locally elected bodies, and on the Select Committee we are all, by and large, localists who believe that things can be best done and organised at a local level, but we thought the idea of having chairs elected by the home council was quite a good one. We did not want it to be imposed on councils, but we suggested one or two pilots to show what could be done. The Minister might be able to let us know how far that has gone.

We certainly welcome the work that the LGA is now doing with the Centre for Public Scrutiny to take those ideas forward. We look forward to the guidance that the Government are eventually going to produce on the basis of the report.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

It is a pleasure to serve under your chairmanship, Mr Sharma, I think for the first time. I congratulate the hon. Member for Sheffield South East (Mr Betts) on securing the debate. I thank him and the members of his Committee for their important work. I stand here in some trepidation, responding to a debate in which I think I am the only parliamentarian who has not been a local councillor at some point.

[Mr Betts]

There is still time.

[Rishi Sunak]

One job at a time, perhaps. Collectively, there is probably over half a century’s worth of local government experience in the room. I pay tribute to that service. The hon. Member for Sheffield South East said that this may not be a topic that attracts front-page headline news, but nevertheless it is an important topic. It is a credit to him and his Committee that they took the time to thoroughly investigate a topic that deserves scrutiny but that otherwise may not have had the chance to be debated and aired in this place.

Scrutiny is fundamentally important to the successful functioning of local democracy, so I welcome the opportunity to reflect on the Committee’s findings. It has a key role to play in ensuring local accountability and the efficient delivery of public services. Scrutiny committees can play a key role in voicing the concerns of local people. I hope the Government response makes it clear that I value the role that scrutiny can play in supporting accountable and transparent decision making and the effective delivery of council functions. The principal takeaway point for me from the Committee’s report, which the hon. Member for Sheffield South East alluded to, is that the organisational culture determines whether scrutiny works well. Where there is a culture of welcoming challenge, the scrutiny process in councils is effective.

I would like to start by setting out the core principles that underpin Government’s approach to scrutiny, before turning to the specific recommendations of the report. First, councils are democratically elected bodies and are ultimately accountable to their electorate. Secondly, as a localist, I take the view that councils are best placed to know which scrutiny arrangements will suit their own individual circumstances. Thirdly, Government have a role to play in ensuring that councils are aware of what effective scrutiny looks like and how best to carry it out. Lastly, overview and scrutiny is just one part of the wider accountability framework for local government, along with the requirement to publish certain information online for transparency, the requirements for independent audit, the complaints process and the presence of independent local media.

The rationale behind the Government’s response was, therefore, to accept those recommendations that would increase councils’ understanding of the importance of scrutiny and how to conduct it, but to tread carefully with the requirements that would place additional requirements on local authorities or reduce their flexibility to decide for themselves which scrutiny arrangements to put in place.

I will turn to some of those specific recommendations. The Committee’s first recommendation clearly will enhance councils’ understanding of the importance of scrutiny and how to conduct it. The Committee pointed out, not unfairly, that statutory guidance was updated more than a decade ago. I was more than happy to agree to update that. I am keen that the new guidance is of genuine use to councils and is not just a tick-box exercise that simply restates their legal obligations. My Department is already at work with the sector to ensure that it delivers the right messages in the right way. Broadly, the guidance will seek to ensure that councils know the purpose of scrutiny, what effective scrutiny looks like, how to conduct it effectively and the benefits it can bring. More specifically, it will cover some of the specific things that were heard today, such as reports to full councils or the role of the public. I look forward to publishing that revised guidance before the end of this year.

The hon. Member for Sheffield South East and the hon. Member for Makerfield (Yvonne Fovargue) raised the concern of public scrutiny of local enterprise partnerships. The Committee’s report seemed to suggest that it was the exception rather than rule. I want to reassure hon. Members that I agree fully that local scrutiny is essential to holding LEPs to account. The local enterprise partnerships national assurance framework is set by central Government and LEPs must comply with it to receive funding.

Last year, one of the Department’s non-executive directors, Mary Ney, led a review into LEP governance and transparency. We are in the process of fully implementing all her recommendations; but I agree there is more to do to ensure that LEPs and local partners collaborate effectively to deliver better outcomes for the public. That is why we are currently undertaking a Minister-led review that will consider the role of local scrutiny in LEP governance. It will also bring forward reforms to LEPs’ roles, leadership, accountability and geography. It will be published in the coming months.

I apologise to the hon. Member for Sheffield South East and his Committee that he has not received the letter that he is due. I will ensure that gets to him in short order, to set out what has already happened and what is happening to improve governance and scrutiny for LEPS.

[Mr Betts]

I thank the Minister for that reassurance. We will get a letter in short order saying that something will happen in the coming months. Could the Minister be more precise about what “the coming months” might mean?

[Rishi Sunak]

I would love to be, but the review is being conducted by my colleague, the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for Rossendale and Darwen (Jake Berry), so I do not have the exact timing to hand. The review was announced through the industrial strategy White Paper. I am sure that we will share as much information as we are able to with the Committee. The hon. Gentleman knows that, alongside that, the assurance framework is in the process of being reviewed and updated. That work is going on with people in the industry, including the Chartered Institute of Public Finance and Accountancy and officials. I will make sure that all that is contained in the letter, with as much transparency on timing as we are able to give.

Another key concern that the Committee raised was that scrutiny seemed to be a second-order matter for combined authorities. I assure hon. Members that I take accountability in these new authorities very seriously. I am confident that the framework we have put in place provides the basis for a robust and consistent approach to scrutiny for combined authorities across the country. In particular, the Combined Authorities (Overview and Scrutiny Committees, Access to Information and Audit Committees) Order 2017 was a key step in implementing devolution deals, and will ensure effective accountability for the new budgets and powers that have been devolved.

Members raised the question of resourcing. The Government announced at the last Budget that they will make available to mayoral combined authorities a £12 million fund for financial years 2018-19 and 2019-20 to boost Mayors’ capacity and resources. Combined authorities are free to use that to ensure that scrutiny and accountability arrangements are effectively resourced and supported.

I turn to the recommendations that the Government are considering. Access to information was raised by all three Back-Bench Members who spoke—my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Members for Blaydon (Liz Twist) and for Sheffield South East. They made a persuasive and compelling case that we should have a hard look at that area. As a new Minister, I tell my hon. Friend that the point about information was the one thing that really stuck with me. In our response to the Select Committee, we committed to looking at that and deciding how best to manage it.

I agree that scrutiny committees should be able to access the information they need to do their jobs effectively. I can see that some executives might seek to deny committees access to that information if they do not appreciate their obligations or understand the value of scrutiny. I want to take soundings from the sector and figure out how best to move forward before committing, but hon. Members’ case that this is something we should consider carefully will stick with me, and I will ensure that I take it away. If we decide that new measures are appropriate, I will of course come back to the Select Committee with those.

My hon. Friend the Member for Harrow East and the hon. Member for Sheffield South East also raised the role of elected chairs. My officials and I will speak to the sector and think about how best we can establish the impact of elected chairs on the effectiveness of scrutiny committees. In general, chairs should be selected on the basis of their skills, experience, integrity and objectivity, not of how amenable they are to the executive. Although the new guidance will remind councils that they already have the option to elect rather than appoint a chair, it is right that every council should decide for itself how to select its members.

Let me say a few words about some of the recommendations about which there is a small difference of opinion, which I hope I can explain. On the point about councils publishing a summary of resources, although the Government require councils to publish certain information for transparency purposes, making available details of the resources allocated to scrutiny would be difficult in practice, for the simple reason that councils often do not have a dedicated scrutiny officer or staff. Instead, they pull in resources as and when they are needed, so it may be difficult for them to produce accurate figures.

[Bob Blackman]

I remember that a former Secretary of State—namely, Sir Eric Pickles—believed absolutely in transparency, such that he insisted that every council must publish every item of expenditure in excess of £500. Given that I do not think that policy has changed, what is the problem with asking councils to publish what should be a considerably higher figure than £500?

[Rishi Sunak]

I agree that transparency is important, and I am glad that my hon. Friend supports the transparency agenda, which the Government continue to lead. Transparency is of course the best disinfectant and the best way for accountability to work in practice. There is a practical difficulty with trying to aggregate lots of small expenditures, which is why there is a £500 threshold in the transparency code. I agree that £50 here, £25 there and another £100 there may add up to a greater figure, but identifying all the individual components may be tricky. However, I agree that transparency is important.

The hon. Member for Blaydon mentioned training. In its report, the Select Committee suggests that the training offered to members and officers does not always meet their needs, and that the Department needs to better manage the funding it provides to the sector. Having looked into the training offer, I remain broadly happy with it. It already includes a specific two-day course for new or aspiring scrutiny chairs, and I am comfortable that, for now, it meets the needs of the sector.

I note that the Local Government Association wrote to the Select Committee to provide further details of the overwhelmingly positive feedback it has received about its training programme. The Committee will be aware that our new memorandum of understanding with the LGA sets out our expectation that it will remain responsive to feedback and ensure that the training it offers remains relevant and effective. However, I agree that training is important, and I hope that the response the Committee gets from the LGA reassures it that what is in place is at least a good foundation.

[Liz Twist]

I thank the Minister for those comments. Will he ensure that all authorities not only know that the training offer is there, but encourage their officers and members to take it up? We heard that not all authorities do that, so it would be really helpful if the Government, through the LGA, stressed that point.

[Rishi Sunak]

The hon. Lady is right. I note that in its oral evidence, the LGA recognised the need to get into councils that might not be doing scrutiny as well as they should. I think it will have taken that message away as a result of coming before the Select Committee and engaging on this topic, and I will pass that message on, too, to ensure that it was heard loud and clear.

[Mr Betts]

I am not sure whether the Minister covered this point. He spoke about the importance of access to information and about considering how that can be improved, but he did not make it clear whether that applies just to information held by councils themselves or to information held by other public bodies, such as the Department for Work and Pensions, the police service and the fire service, just as it already applies to the Department of Health and Social Care and its bodies at local level. Does he accept that scrutiny committees have a right to scrutinise and access information and witnesses from those other public organisations?

[Rishi Sunak]

I was talking specifically about information relating to councils’ own functions in the first instance. On the broader point, which was also raised by my hon. Friend the Member for Harrow East, there are existing mechanisms for health and crime because, when those structures were set up, those were the agencies that the sector felt it did the most partnership working with. I am happy to talk to the sector to find out whether there is appetite for a greater ability to scrutinise other bodies, whether that process would work practically, and whether the burden it would put on authorities is appropriate. It is important to recognise that many of those other parts of the public sector are scrutinised separately, and to ensure that there is not duplication of scrutiny. Every public agency tries to focus on its day job, so we need to get the balance right between having appropriate scrutiny and not duplicating scrutiny, which would mean taking focus and resources away from agencies doing their job.

[Mr Betts]

I thank the Minister for giving way a second time on this point. I hope that, having looked at that and talked to the sector about it, he will write back to the Select Committee with his findings. It is difficult to see where the Department for Work and Pensions has a spotlight shone on it often and effectively at local level. I recognise his point about putting burdens on local government. This is intended to be not a burden but an opportunity, which local authorities may take up if they wish. There would not be a requirement to scrutinise other bodies, but authorities would have the opportunity to do so if they wished.

[Rishi Sunak]

I will of course write to the hon. Gentleman when we have had conversations with the sector on that point.

[Bob Blackman]

I want to clarify the point about information, which goes absolutely to scrutiny. I made the point that the presumption should be that information should be available. Rather than the current position, in which officers grudgingly give information to scrutiny committees and suchlike, it should be for the legal officer to say why information should not be available. Will my hon. Friend look at that specific point in detail and come back to the Select Committee?

[Rishi Sunak]

Hopefully I can reassure my hon. Friend. The main point that I have taken from the debate from all contributions is about access to information and ensuring that it is not unreasonably withheld. It is tricky to get the balance right, making sure that time is not wasted and that information that is genuinely commercial or commercially sensitive in some other regard is protected. However, I have heard that message loud and clear and it is a fair point, so I will go away and think about it in more depth.

Of course, such conversations with the sector are already happening and if there is a path to do something different, we will consider it. I would be loth to commit to something now, but I can commit to examining the issue properly and seriously, given the weight and force of the arguments made.

It was reassuring to see that the Committee’s report acknowledges that scrutiny is working effectively in many councils. We should recognise that. Of course, we should accept that in some places it does not work as well as might be expected, but it does have a key role to play in ensuring local accountability and the effective delivery of services so it is important that councils know how to do it properly. I have committed to working with the sector to update the guidance, ensuring that it meets the needs of councillors and their officers, and I am happy to give further consideration to some of the topics I touched on earlier.

I thank hon. Members who have contributed to the debate. I am grateful to have had the opportunity to discuss this important topic. We are talking about scrutiny and, as was raised in Members’ comments, Select Committees, and in particular the Housing, Communities and Local Government Committee, which I am privileged to appear before, are a great example of how scrutiny can work in practice. It works best in this place—as it should in local authorities—when done on a collegiate basis, with people putting the interests of the public whom they serve first and working as a constructive friend of the people who are trying to make decisions. This Committee is a fantastic example for local authorities and the local government sector to look at. It is a pleasure to work with it, not just on this issue, but hopefully on other issues in the months to come.