Robert Neill
Main Page: Robert Neill (Conservative - Bromley and Chislehurst)Local Audit and Accountability Bill [Lords]
Robert Neill Excerpts
Mr Pickles
My right hon. Friend makes a reasonable point. The audit regime is just part of the process of transparency; the publication of amounts above £500 and the right to be able to see what the council is doing increase the opportunity for the taxpayer, the voter and the local press to investigate.
Robert Neill (Bromley and Chislehurst) (Con)
I entirely agree with my right hon. Friend’s observation about the great opportunities we are giving to the council tax payer. Does he also agree that the perverse consequence of the previous system was that council policies were often skewed towards obtaining the result required to get approval by the Audit Commission, rather than towards the priorities that the council tax payers would have wished for?
Mr Pickles
My hon. Friend makes a reasonable point. There was a box-ticking culture, and local authorities were often spending an enormous amount of time on increasing their scoring as opposed to delivering decent services for local people.
Protection remains in place for whistleblowers and to prevent Enron-style conflicts of interest. We need to remember that the Westminster homes scandal was uncovered not by the Audit Commission, but by an outsourced auditor from Touche Ross. There is no reason why private sector auditors cannot be independent and fiercely robust. Reserve intervention powers will remain to tackle systemic failures such as those at Doncaster, working with the local government sector, but they are the exception that proves the rule. There will be a continuing role for both Members of Parliament and Ministers to use their public voice to challenge local government when bad decisions are made—that is called democracy.
The second provision in this Bill will protect the local press from unfair local competition. Where local newspapers thrive, local democracy thrives. Local newspapers not only inform residents of what is going on, but play a vital role in exposing local waste, mistakes and corruption, and, thus, in holding councils to account. When councils put out their own glossy free sheets to compete with local newspapers, local democracy is the loser. Tackling that abuse was a key pledge in not just the coalition agreement, but the general election manifestos of both parties.
In 2011, Parliament previously strengthened the local government publicity code, but a small number of councils have intentionally ignored it, with Tower Hamlets being a case in point. Ofcom has found it guilty of breaching broadcast rules for political advertising, but no power exists to tackle its political propaganda sheet, and local auditors have recently refused to intervene. Such actions are not just a misuse of public funds; they are, ultimately, harmful to local democracy and the independence of the free press. They are also further evidence of a worrying pattern of divisive community politics and mismanagement of council staff and resources by the mayoral administration. So provisions in the Bill will ensure that we will act when Parliament is ignored. Yes, this is central intervention, but it is being done to protect the free press and deal with the serious abuse of power. Even in a localist system, there is a role for central Government to set an ethical framework and maintain checks and balances on local government to prevent corruption. Without such backstops, there would be a siren voice for a return to top-down inspections or to set up a quango such as the Audit Commission.
The third and final provision in the Bill will close a legal loophole and ensure that all councils’ bills will be set so that they are fully accountable to local taxpayers. Some unelected bodies are setting a levy on council tax bills with little or no accountability for local voters—from waste disposal authorities and integrated transport authorities to crematorium boards. We will ensure that the direct democracy provisions in the Localism Act 2011 allow council tax referendums to apply also to that quango state.
The Bill has already been scrutinised in the Lords, where the Government listened to a range of views and made a number of minor amendments. Subject to the will of the House, we intend to make the Bill even stronger. We will modernise the archaic rules on parish polls, for example by allowing longer voting hours and postal votes. Perhaps our most significant proposal is to give people the right to film, blog or tweet at council meetings. Some councils would prefer meetings to be held behind closed doors, but the public has the right to see decisions being taken and how the money is spent.
A private Member’s Bill promoted by Mrs Thatcher introduced the right to attend council meetings back in 1960, and that in turn built on a law introduced by the Liberal Government of 1908, so this is truly a coalition of minds. It is right that we should now bring her legacy up to date for the digital age. We have previously amended secondary legislation to open up councils’ executive meetings and have encouraged councils to open up their full council and committees. Many have refused, however, citing health and safety, data protection or just standing orders. Tower Hamlets said that such a change would lead to “reputational damage”. Well, yes, it probably will when people see what is going on in their council chambers. There have even been cases of the police being called to threaten bloggers with arrest. We will therefore make the necessary changes to primary legislation to allow full councils and committees to be open as well.
Our argument is that the coalition Government are scrapping the top-down red tape of Whitehall inspection and micro-management. That will save taxpayers’ money and help to devolve power, but it must go hand in hand with local transparency and accountability. We must ensure an independent free press and scrutinise and challenge bad decisions by councils. Individual taxpayers and the new wave of citizen journalists must be let in to conduct their own scrutiny. We are localising audit and scrapping protection, while ensuring that there is protection against the bad old days of municipal corruption. In short, the Bill will deliver greater openness, stronger local democracy, accountability and significant savings for the taxpayer. I commend it to the House.
Hilary Benn
I do not accept the argument that the Freedom of Information Act is superfluous, because it depends on whether auditors seek the information in the first place. I think that, regardless of the action that auditors might or might not take, the public should be protected by having the right to request the information. That point was made extremely forcefully and eloquently by my noble Friend Lord Wills in the other place.
There are some other concerns. We need clarity on who will maintain the outsourced contracts when the Audit Commission finally disappears. What about certification relating to reimbursement of housing benefit claims? We welcome the movement of the national fraud initiative to the Cabinet Office, but the provisions on the purposes for which data matching can be used do not include the prevention and detection of maladministration and error, which we would like to be reflected.
That is what is in the Bill, but there is a great big hole in it. It is principally a backward-looking piece of legislation giving effect to the Secretary of State’s decision of three years ago. He has completely failed to make provision for auditing in the new world being built before our very eyes, which I think is an astonishing omission. The proposed audit arrangements simply do not provide for that changing world in which public services are managed and provided. We have shared services, community budgets, city deals and combined authorities, which are all part of a shift towards much stronger working between central and local government, yet the current and proposed audit arrangements still focus much too narrowly on institutions—the arrangements in the Bill for local government and the National Audit Office for Whitehall—rather than the work they do. Therefore, as community budgets develop, does it really make sense for different auditors to examine the use of the local government pound while the NAO examines the use of the Whitehall pound when they are being spent together? If the service is shared and common, so should the audit be. I hope that Ministers will reflect on that point.
Robust independent audit of public bodies is essential to ensuring public confidence in Government. It is up to us to ensure that we get it right, especially after the three years that have intervened, followed by a Bill that—I gently point out—took longer to gestate than a baby African elephant.
I turn now to clause 38. Let me say at the outset that one local authority publication, which the Secretary of State mentioned, is pretty clearly outside the letter and the spirit of the code—that is, East End Life, which is weekly, advertises property, and carries local news. The Labour leader in Tower Hamlets says that it is an expense that residents cannot afford. The question for the House is therefore a simple one: why has the Secretary of State not done anything about it already? Why has he not sought judicial review? It is no good his shaking his head—he could have taken action, given the fuss he is making, but he has chosen not to do so, and he gives no answer.
Robert Neill
On precisely what grounds does the right hon. Gentleman think that judicial review could take place, since non-compliance with the code has no sanction attached to it?
Hilary Benn
It would be a very important legal argument as to whether the courts would attach weight to what is a code. If the Secretary of State is that worried about East End Life, why did he not take action before coming to this House to ask for clause 38 and the extraordinary powers it contains?
The Secretary of State is asking the House to give him the right, if he feels like it, to control local council publications. We have recently had a great deal of debate about the royal charter following the Leveson report. [Interruption.] The Secretary of State is chuntering, but there is a lot more to say about this clause. The charge has been levied, quite wrongly, that politicians are trying to control what appears in the press, yet this clause really would give a politician the power to control, if he wanted to, what is written, how often, and in what way. This shows that underneath a lot of localist rhetoric, the right hon. Gentleman is nothing more than a centralist. I am astonished that Liberal Democrats appear to be happy to go along with a thoroughly illiberal proposal.
The clause would allow the Secretary of State to issue an order directing that one authority, or every authority, comply with his interpretation of one or all of the provisions of the code. I remind the House that the code covers paid advertising, leaflet campaigns, publication of free newspapers and news sheets, the maintenance of websites, the frequency of publications, the content of publications, and even display stands at party political conferences. Clause 38(1)—the first time I read this I could not really believe it—says the following—[Interruption.] I know that Government Members do not want to hear it. Perhaps the right hon. Gentleman could explain why he wants to be given this power:
“The Secretary of State may give a direction to an authority whether or not the Secretary of State thinks that the authority is complying with the code to which it relates.”
Roughly translated, he wants the power to give direction to a council even though he does not think that it is not complying with the code, and nor does anyone else. We are sometimes mystified by the way his mind works, but under this Bill he will not even have to answer to himself for his own thoughts and actions.
That prompts the question why the Secretary of State has put this measure forward. He advanced two arguments, the first of which is about competition with local newspapers. I agree that local newspapers are a very important part of our democracy. Their independent reporting holds us to account, and they give us important news and information about what is happening in our area. However, many local newspapers are in real difficulties as readership declines and people get more of their news from the electronic media. Sir Merrick Cockell, the highly respected Conservative leader of the Local Government Association, says:
“We’ve simply not been shown any evidence that council publications compete unfairly with local newspapers.”
Such evidence as we do have suggests that the amount of advertising revenue taken by council publications is relatively small, especially compared with the amount of revenue contributed to local newspapers by way of statutory notices.
It is therefore very curious that, despite great play being made in the Secretary of State’s speech and in all the consultation documents of unfair competition and the loss of advertising revenue, it was reported a little while ago that he had indicated to a private meeting of Conservative councillors at the LGA conference that the requirement to place statutory notices in local newspapers is going to be phased out within a couple of years. I would be happy to give way to the right hon. Gentleman if he would like to clarify the Government’s position on the future of statutory notices. The House will have noticed that he has nothing to say. That is because on the one hand he is arguing that council magazines and the advertising revenue they take are a terrible threat, while on the other hand it seems, as reported by Conservative councillors who were at the meeting, that he is thinking of withdrawing a much larger amount of money that papers get from local councils in the form of statutory notices. The truth is that his position is utterly inconsistent.
Robert Neill (Bromley and Chislehurst) (Con)
I was delighted to hear my right hon. Friend the Secretary of State finish an important piece of work to which we committed ourselves when we first came into government. I was intrigued to listen to the right hon. Member for Leeds Central (Hilary Benn), the shadow Secretary of State. It was a curate’s egg performance. I grant that there were some near rib-tickling moments—some of which were probably not intended—but it was a classic case of an Opposition searching for something to oppose. My right hon. Friend has introduced and delivered a Bill that the Government said at the very beginning of the coalition we would introduce. I am delighted that it has come to fruition.
Let me deal with the various parts of the Bill. I was fascinated to see some of the Audit Commission’s expenditure when I was part of the Opposition Front-Bench team. In the climate of the 1980s, there was an argument for considering a body such as the Audit Commission. However, two things happened: the Labour Government caused massive mission creep in the Audit Commission, and the climate changed. What caused the massive mission creep? Effectively, the Audit Commission was used as the machine for imposing a centralised performance regime on local government. That was a distinctly and fundamentally un-localist thing to do.
The situation is well described by Professor George Jones of the London School of Economics, whom many hon. Members will know—he is the biographer of Herbert Morrison. Professor Jones would not regard himself as a natural admirer and advocate of the coalition Government’s policies, but he believes in local independence. I disagree with many of the things he says, but he has described the Labour Government as taking “a fateful decision” that
“turned the Audit Commission in effect into an agent of central government…[It] marked the end of its independence, which was confirmed as further tasks required by central government were placed on the Commission: inspecting local authorities’ performance, judging and scoring them.”
Professor Jones is one of the leading independent academics. Most people would say he has a left-of-centre viewpoint—he happens not to be a member of any political party—but that significant academic is condemning the actions of a Government of whom the right hon. Member for Leeds Central was a member. It is therefore a bit rich of him to accuse the Secretary of State of back-door localism. Anyone who knows my right hon. Friend and the history will know that that is nonsense.
The Audit Commission grew beyond its remit to such an extent that it became the elephant in the room in a great deal of local government budgeting. Increasingly, time and again, local authorities—officers and members—felt themselves to be more constrained. They felt they had to play the system and adopt policies and priorities that ticked the box of Audit Commission approval. The system of reward and funding was such that they were incentivised to tick the box to meet central Government objectives rather than those of their council tax payers.
That was initially swept away when the coalition Government got rid of the iniquitous comprehensive area assessments regime, which, at that time, was a huge amount of the Audit Commission’s work. Essentially, the core audit function was left. As I recall, by that stage, the Audit Commission was about the fourth largest audit practice in the country. There was no logical reason why such a large audit practice should not operate in a commercial environment, providing that a proper statutory regime was in place to overarch it and that there was a proper regulation and performance regime, which the Bill introduces.
We saw that when the in-house audit practice was successfully floated in the private sector. It is worth noting that, as a consequence, there has been a 40% reduction in audit fees paid by local authorities. By the time the Bill is implemented and the Audit Commission is finally abolished, there will be a 50% reduction in those bills. That has got to be a good and thoroughly localist thing. Those of us experienced in local government will remember regular complaints about the level of charging by the Audit Commission. There was also the iniquitous situation of its top-slicing, whether it did the job in-house or it was done through private sector contractors, which was clearly unjustifiable. I hope people accept that the Bill recognises a sensible reality.
I have to say with a smile that I note the cost of trying to persuade the Opposition Front Bench team to change our minds was put at £56,000. They were getting my right hon. Friend the Secretary of State and I cheaply at that price. On the other hand, it did not have much effect, so perhaps they were had in any event. I assume that £50,000 was for my right hon. Friend and £6,000 was for me—I am fully aware of the status of these things—but it says something of the level of unreality in the Audit Commission. In the end, that is why it had so few friends in local government and why its departure will be unlamented. Instead, we have a sensible set of checks and balances which need to be put in place, and which I think the local government sector now understands.
It is also worth saying that performance management and improvement in the sector has matured—a point made in interventions on the right hon. Member for Leeds Central. There is a great willingness to collaborate and work closely together; that is a classic case of recognising that the game has moved on.
The Bill seeks to tackle the code of practice on publicity, which is significant. I was the Minister when we introduced the code and there had been a number of egregious examples of abuse by local authorities. East End Life is of course the example most regularly cited, but I am afraid there are others.
Hilary Benn
It would certainly help consideration of the Bill on Second Reading if the hon. Gentleman listed those examples. Indeed, Baroness Hanham said that she had a list, but did not want to share it with Members in the other place. Perhaps the hon. Gentleman will now tell us which local authorities are breaking the code.
Robert Neill
The right hon. Gentleman obviously knows that the only roles in Gilbert and Sullivan I could do at school were the patter songs—one does not have to sing in tune. I do “have a little list” and will come to it in but a moment.
It is significant that East End Life, run now by an independent council but initiated at a time when the council was otherwise controlled, is one case on which the right hon. Gentleman and I can agree. We agree that that is a particularly bad case, but it goes further than that. Much of East End Life was based on some of the work done by The Londoner, which was produced by the first Mayor of London. By the end of his first term of office, he was a member of the right hon. Gentleman’s party. The current Mayor of London has had no difficulty in getting his case and his arguments across to the London public, and getting information about Greater London authority services across, without the cost of The Londoner. In fairness, even when Ken Livingstone was a member of the Labour party, he supported the current mayor of Tower Hamlets—against a Labour candidate. Perhaps I should not remind the right hon. Gentleman of that.
Andrew Bridgen (North West Leicestershire) (Con)
A constituent of mine is a member of an active parish council in my constituency. She raised concerns that the Bill seeks to curtail how parish councils can communicate regularly with their constituents. Does my hon. Friend agree that that would not be right?
Robert Neill
Many responsible local authorities communicate sensibly and proportionately with their constituents, and there is no reason why parish councils cannot do that too. There has been a great deal of scaremongering from some commentators and sources, some politically motivated, regarding the extent of the Bill. I am sure that my hon. Friend’s parish council has nothing to fear.
Chris Williamson
Might the current Mayor of London’s ability to get his message out and his not having to rely on a council newspaper have something to do with the fact that the Evening Standard is his chief cheerleader and ran a vituperative campaign against the previous incumbent, and might that have something to do with the previous incumbent’s inability to get his message out?
Robert Neill
Now that, like me, the hon. Gentleman has time to reflect from the Back Benches, he might consider that part of this problem was that he always fought the last battle. That one is dead and gone. The current Mayor gets his message across because he makes the right case to Londoners. I would think it a good thing if an independent newspaper supported my policies; it would be better than having to pay £1.5 million or £2 million to cook up a newspaper to support them instead. So I do not think he has advanced his case with that intervention.
For another example, the right hon. Member for Leeds Central could pop across to Greenwich from Tower Hamlets and have a look at the—taxpayer-funded, of course—Greenwich Time which has been published for several years now by the Labour-controlled council. In one recent editorial, the council leader attacked the Government’s policies of austerity for damaging the people of Greenwich. That is an interesting view which might have come straight from the pen of the shadow Chancellor—perhaps it did, for all I know—but I am not convinced that it is relevant to the role of the local authority.
Neither am I convinced that it is the role of that interesting Greenwich publication to tell me about the football fixtures or the cinema listings or to give me helpful restaurant reviews. It is the same with East End Life. These are all worthy things that a commercial local paper does, but to use the phrase of my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), it is not a sensible use of council resources. I am sure we all want leisure or weight-loss ideas, but it is not the job of these supposed newspapers—these council publications—to provide them. It is a deliberate move on to the turf of privately run, independent newspapers. I say “deliberate” because in some cases, I regret to say, local authorities do not like the competition and criticism. That is what this is about.
Moving away from Greenwich, the right hon. Member for Leeds Central could cross the river again to Newham, where The Newham Mag makes great play of the “savage cuts”—an interesting phrase that I am sure the ever-restrained mayor of Newham had nothing to do with—imposed by the Government. In one fascinating passage, it stated that some councils pulled the plug on their Christmas lights this year because of “savage cuts” in their funding from central Government. When we worked on the formula grant, my right hon. Friend the Secretary of State and I did not consider taking out local authorities’ Christmas light funding. It was a clever use of words to try to suggest that central Government were being Scrooge and making it impossible for people to have Christmas lights on their high street. The article did not mention, of course, that Newham council did not cut the publicity budget, which paid for The Newham Mag, and which even on a conservative estimate would run to about 10 sets of high street lights. Interestingly, even in otherwise legitimate advertising—about making benefit claims and where to go—every reference to cuts is prefaced with “savage” or “massive”. It is clearly politically loaded and another example of how councils are acting against the spirit of the code.
Ian Mearns
I am following the thread of the hon. Gentleman’s argument. Is he actually saying that the Gateshead Post, which used to be published every Wednesday, but met its demise more than a dozen years ago, was put out of business by a council publication that did not exist at the time it ceased printing?
Robert Neill
What I am saying is that the Gateshead Post was entitled to its view because it was not paid for by public money.
If the leader of Barking and Dagenham council or the mayor of Newham want to put across their views, they can put out a press release through their respective Labour party offices, just as I put my views across in press releases paid for by my constituency party. I do not believe that I should get the council tax payers in my area to pay for me to put out my political views. Such activities are happening consistently, however. The London borough of Barking and Dagenham’s News stated that the council had been forced to make cuts to services. The article related to the spending review, but the council made no reduction to the £1.5 million that it was spending on the News. Simply hiding behind East End Life might make the shadow Secretary of State appear reasonable, but there is a lot more to it than that. I regret to say that, as it happens, all the publications on my list are in Labour areas.
Chris Williamson
The hon. Gentleman has expressed his opposition to press releases being distributed by local authorities on behalf of the controlling group. When he was a Minister in the Department for Communities and Local Government, did his Department issue press releases on his behalf?
Robert Neill
Yes, but I did not use them to attack the policies of the Opposition in party political terms. I would not have been allowed to do so under the ministerial code, and anyway they were dealt with by civil servants. I think the hon. Gentleman is also forgetting that, in all the cases I have described, local authorities that are using publicly funded publicity instruments to protest against Government cuts are using discretionary spend that they could have directed into front-line services. That is a classic example of why the Labour party is unhappy about this issue. I regret to say that it goes well beyond the egregious case of Tower Hamlets.
If local authorities want to get information across, which I accept has to happen, they might like to do as my own council, the London borough of Bromley, does. Rather than going to the expense of running its own newspaper, it puts a four-page wrapper around one of our local papers about four times a year. Those pages set out the information very attractively. They are well designed and contain professional journalistic input, and they wrap round the free-sheet that is delivered to everyone anyway. That is a cost-effective and politically proportionate way of getting genuine information across. Also, it does not offend against the code. It is nonsense that although an independent watchdog has held Tower Hamlets to be in breach of the publicity and advertising codes, there is still no legal means of doing anything about it. The Bill will rectify that anomaly.
I say with respect to the right hon. Member for Leeds Central that it is not good enough to say that we could try a judicial review.
Robert Neill
Well, we could try to resolve many things by way of a judicial review, but whether that would be a wise or proportionate use of public funds, when the outcome is highly uncertain, is questionable. Surely it would be much better to deal with the problem at source, in the way that is being proposed. The Opposition appear to have little to say on this matter, and they appear to be shedding a great many crocodile tears about this aspect of the Bill.
Andy Sawford (Corby) (Lab/Co-op)
The hon. Gentleman has shared his thoughts on a range of publications by London local authorities. I invite him to condemn Hammersmith and Fulham council, which he would surely deprecate for publishing a magazine that not only advertises “Sofas and Stuff” on the local high street but comments on the impacts of Government policy on local residents. Will he also consider the publication from the royal borough of Kensington and Chelsea, which gives its views on the Government’s Crossrail proposals and on funding implications for the council, among other things? Does the hon. Gentleman see any difference between that—
Madam Deputy Speaker (Dawn Primarolo)
Order. The hon. Gentleman is new to the Dispatch Box, but I must remind him that interventions must be brief, whether they are made from the Dispatch Box or from the Back Benches.
Robert Neill
There is often a material difference, depending on the precise nature of the language used and the objectives sought to be put across. That is precisely why the Bill is framed in such a way as to provide discretion for the Secretary of State to act where a number of triggers are coming into play. I do not think that intervention worked from the hon. Gentleman’s point of view either.
Let me deal with the issue of council tax referendums. A great deal of objection was raised in the other place, but I do not believe that it was all genuinely warranted. I am glad that the right hon. Member for Leeds Central did not pursue the argument of retrospectivity to the extent that it was pursued in the other place. My noble Friend Baroness Hanham dealt with that effectively, making very clear the Government’s intentions in this regard. Levying bodies and their principal councils had clear notice, so that argument has been knocked on the head. I want to take the opportunity to pay tribute to Baroness Hanham’s work as a Minister in the Department for Communities and Local Government. She was a fantastic and unusually hard-working colleague—someone who probably has more experience in local government than many people here will have forgotten about, let alone learned from. I hope I am allowed to say that, Madam Deputy Speaker.
The key objective of council tax referendums is to protect the council tax payer. It could not be right to get to a position where it was possible to have a degree of expenditure shunting. We sometimes hear about cost shunting, but a degree of expenditure shunting is possible in theory, from the constituent member authorities of a levying body on to the levying body in the knowledge that the expenditure moved on to the joint body would not be captured by the council tax threshold referendum. With respect, that would be pulling the wool over the eyes of the council tax payers of the local authority’s area. The council tax referendum proposals are therefore sensible in protecting council tax payers by removing a loophole that could have been open to that sort of abuse. As the Secretary of State said, when we looked at city deals, we found that the amount involved was not such as to cause the extent of the problems suggested.
For a raft of reasons, the levy on some local authority areas amounts to more than the amount of council tax itself. The levies account for something like 56% of council tax bills—in Liverpool, for example. I am sure that all hon. Members who support our proposals for council tax referendums would agree, in principle at any rate, that they exist to protect the council tax payer. It surely cannot be right that under current arrangements over half the spend is exempt from control by a referendum.
Annette Brooke
I quite understand the intention behind this measure, but could my hon. Friend help me with this query? Is not an unintended consequence possible? If the referendum were lost, the levy went ahead and the council tax was frozen, might not the penalty fall back on the council, which would have to bear the costs and cut back on its own services?
Robert Neill
In the case of the majority of the larger levying authorities—it does not apply to some smaller ones—my experience has often been that they take the form of joint boards or joint authorities, which have elected members of the constituent authorities sitting on them, but who are also in a sense members of a separate legal personality. That is why they are not part of the council for the purposes of the council tax itself. If a council is concerned that its council tax bill should not rise unduly, which might put it in jeopardy of breaching the referendum threshold, it would be perfectly logical and sensible for it to talk to its representatives on the board. If I were the leader of that council, I would talk in clear terms to my colleagues who were the leaders of the other constituent authorities. There is thus a perfectly good and practical means for council leaders and their representatives to avoid that happening. Equally, when they sign up to particular elements of expenditure through a joint board, it is not unreasonable for them to take into account the budgetary consequences of that expenditure for their council tax payers. As I say, these are sensible proposals, which close a loophole.
I hope that the Bill will commend itself to the House. It deals with important issues, and I agree with the right hon. Member for Leeds Central that it is not a purely dry piece of legislation. I congratulate my right hon. Friend the Secretary of State on producing an entirely localist Bill. After all, localism is not just about passing power down to local authorities as institutions; it is also about passing power down to the residents of those authorities, who are the ultimate consumers, and the ultimate people to whom councillors, officers, and we as Members of Parliament ought to be responsible.
Chris Williamson
Let me quote people who perhaps know a little more about these things than me. The draft Local Audit Bill ad hoc committee looked at the matter in detail. It
“heard conflicting evidence about whether and how much public money is likely to be saved by implementing this legislation.”
I have struggled to find anyone who thinks that the proposal is a good idea.
The Audit Commission said:
“Under a free market model, the current benefits of pooling auditors’ costs will be lost and councils in remote geographical locations”—
many of the locations represented by Government Members—
“will have to meet the economic cost of the audit. In some cases this may be significantly higher than historical fee levels.”
The Local Government Information Unit said:
“If the market concentrates further, or even stands still, this will eventually lead to higher, not lower, fees.”
The Select Committee on Communities and Local Government has pointed out that the Government’s proposals for local government
“contrast with the situation in central government, where the NAO is reducing the percentage of work that it contracts out to private firms”.
I do not understand why that double standard is being applied by the Government when it comes to local government. Cynics might say that the Government are creating yet another money-making cartel. We know that the Conservative party has form in using taxpayers’ money to enrich vested interests in the private sector. We need look no further than the privatisation of the utilities, with millions of consumers being ripped off on a quarterly basis by the big six utility companies. We could also look at railways privatisation, which has seen the railway companies fleecing the travelling public, or the deregulation of the private rented sector, where we have seen a massive hike in rents. As a consequence, the housing benefit bill has gone through the roof—some £10 billion a year is going into private landlords’ pockets. This is yet another example of the Conservative party flagrantly using taxpayers’ money to enrich vested interests in the private sector. It is a shameful abuse.
The Communities and Local Government Committee hit the nail on the head:
“Unless the Government can crack the problem of the very limited competition in the audit market in the UK, it will be open to the accusation that the abolition of the Audit Commission is not a measure to save public money but merely a mechanism to transfer public money into private hands.”
I could not put it better myself. Clearly, that is an endorsement of my suspicion about the Government’s real motive for introducing the Bill.
Robert Neill
How does the hon. Gentleman square that with the Competition Commission’s recent report into statutory audit services, which pointed out that some 90% of audits of FTSE 350 companies are dealt with by what are sometimes termed the big four, whereas they only deal with about 50% of local authority audits and mid-sized firms get the bulk of the rest?