FINANCE.

HC Deb 17 July 1888 vol 328 cc1535-46

Property Funds and Costs of County Councils.

Clause 67 (Issue of county stock).

MR. POWELL-WILLIAMS (Birmingham, S.)

, in moving in page 58, after Sub-section (4), to add— Provided that the councils of two or more adjacent counties may combine to issue stock for their joint and several purposes, and, subject to the approval of the Local Government Board, may fix the proper contributions for interest, sinking fund, and expenses applicable to such stock, to be defrayed from time to time by each county so combining, according to its liability for the same, or any part thereof, said, he hoped the Government would be willing to accept the Amendment. He did not move it with any view of increasing the security which any particular county had to offer for a loan it was desirous of raising. He did not intend by it to alter the security in any way. On the other hand, supposing that certain counties were to combine for the purpose of having a common stock, in the event of one county failing to make its proper contribution, he did not propose by the Proviso, nor did he think it would operate in such a way, that the counties entering into a combination would become in any way liable to make good the default of the county which failed to make its proper contribution. The security for the loan, whatever it was, would be the same, and the responsibility would be the same. The ordinary course followed in issuing stock was to publish a prospectus, and the conditions under which the stock was issued would be fully set forth in it, and would be a most complete notice to all persons tendering for the stock that the security was not a joint but a separate security. The invariable rule in regard to stock issued for local purposes was to create a loan fund into which was paid at proper intervals the sum necessary to defray the interest on the loan, and to provide for the sinking fund. The loan fund would be established under the superintendence of the Local Government Board, and proper contributions would be paid by each county entering into the combination. There would, therefore, be no joint purpose to be served, but a central liability in relation to the contributions and the repayment of the loan. The object of the Amendment was not to increase the security, but to enable the counties entering into the combination to borrow at a cheaper rate than they would otherwise be able to do. Anyone who had had any experience at all of the Stock Exchange knew perfectly well that if a small amount of stock were issued the stock itself was neglected; the trans-actions in it were few and infrequent, and it did not attain its natural and real value in the markets. The right hon. Gentleman the President of the Local Government Board informed the Committee yesterday that the borrowing of the County Councils would probably be for very small amounts. Now, if the County Councils were going to the public for very small loans, his (Mr. Powell-Williams's) experience, and he gave it for what it was worth, was that they would not get a good price for their loans; whereas if they could club together and raise stock of a considerable amount, they would be able to put it in the market at a much better price than they would otherwise receive, and the possibility, which was a serious one, of one county bidding for a loan in the market against another county would be removed. He did not see why, as they had what were called Consols secured on the taxes of the country, they should not also have extended over the whole Kingdom, appertaining to every county in the Kingdom, a Local Loan Stock secured on the rates of the country. It was with that object, and in order to make such borrowing that might be necessary cheaper than it would otherwise be, that he moved the Amendment.

Amendment proposed, In page 58, after Sub-section (4), to add the words—"Provided that the councils of two or more adjacent counties may combine to issue stock for their joint and several purposes, and, subject to the approval of the Local Government Board, may fix the proper contributions for interest, sinking fund, and expenses applicable to such stock, to be defrayed from time to time by each county so combining, according to its liability for the same or any part thereof."—(Mr. Powell-Williams.)

Question proposed, "That those words be there added."

THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. RITCHIE) (Tower Hamlets, St. George's)

said, the proposal of the hon. Gentleman was that two or more counties might combine for the purpose of issuing stock. He (Mr. Ritchie) was bound to say that the Government thought it extremely desirable that each county should stand on its own bottom in reference to its own finance. They had no objection whatever to encourage the County Councils to work together when they had a common interest in carrying out any particular works or particular scheme; but he could not think that this proposal had anything in common with any proposal of that kind. He could hardly agree with the hon. Member that the amount and importance of the stock which any one county could issue would not be sufficient to enable the County Council to obtain a good quotation in the market. His own conviction was, that it would be unwise to mix up two counties in connection with financial matters, and it would be better for the Committee to adhere to the proposal in the Bill that each county should stand on its own bottom.

MR. POWELL-WILLIAMS

said, that if that was the opinion of the Government, he would not harass them by pressing the Amendment. He still, however, adhered to the opinion he had expressed, that it would be a useful Amendment to accept. Under the circumstances he would withdraw it.

Amendment, by leave, withdrawn.

Clause agreed to.

Clause 68 (Power of county council to lend to other local authorities) struck out of the Bill.

Clause 69 (Audit of accounts of county council).

MR. CONYBEARE (Cornwall, Camborne)

, in moving, in page 59, line 4, to insert the words— The abstract of the treasurer's accounts shall be published in the two principal newspapers circulating in the county, said, that the Amendment was directed towards securing the publication of an abstract of the accounts in the principal newspapers circulating in the county. He had placed it on the Paper, because, as far as he could gather from the Municipal Corporations Act, no provision was made for such publication.

THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. RITCHIE) (Tower Hamlets, St. George's)

said, that provision was made for the publication of the accounts.

MR. CONYBEARE

said, he thought it was desirable that the accounts should be published in two newspapers. He did not think the proposal would occasion unnecessary expense, but cases had come before him where important statements of this kind had been published in one newspaper only, and that not the principal newspaper of the district, so that many persons who were interested in the matter were unable to see the accounts.

MR. RITCHIE

said, he quite understood the object of the hon. Gentle- man; but one of the provisions of the Bill was that an abstract of the accounts should be published in one or more of the newspapers of the county.

Amendment, by leave, withdrawn.

BARON DIMSDALE (Herts, Hitchin)

, in moving, in page 59, line 6, after "shall," to insert— In the absence of any provision made by the council for the due and proper auditing of its accounts, or of those of the county treasurer or officers of the council, by a properly qualified accountant, said, its object was to provide that the accounts should be audited by the public auditor of the county, wherever no provision was made by the County Council for a due and proper audit. He thought it was wise to give this discretionary power to the Council, so that where no provision was made the Council could make the arrangement suggested in the Amendment. He was aware that there were other Amendments on the Paper to provide that the accounts, instead of being audited by district auditors, should be audited by chartered accountants; but there was a great feeling of dislike in the country against the monopoly of the chartered accountants, and he therefore thought it would be better to provide that the accounts should be audited by a properly qualified accountant, and, if not, then fall back upon the provision contained in the Bill. He could assure the Government that there was a strong feeling that the gentlemen who now performed the duty were perfectly competent to discharge it, and, as a protest against giving the power to chartered accountants, he begged to move the Amendment.

Amendment proposed, In page 59, line 6, after the word "shall," to insert the words "in the absence of any provision made by the council for the due and proper auditing of its accounts, or of those of the county treasurer or officers of the council, by a properly qualified accountant."—(Baron Dimsdale.)

Question proposed, "That those words be there inserted."

MR. RITCHIE

said, that he had two objections to the proposal of his hon. Friend. One was that it would be necessary to determine what was a due and proper audit of accounts; but the second and the most formidable one he had to contend with was that the audit, to be of value, ought to be conducted by auditors who ought to be entirely independent of the Authorities whose accounts they audited. It was evident that the direction in which public feeling extended in the present day was towards a closer rather than a looser audit of the public accounts. It was because he was afraid that the proposal of his hon. Friend was in the direction of the looser form of audit that he could not accept the Amendment.

MR. HENRY H. FOWLER (Wolverhampton, E.)

said, he cordially endorsed every word that had fallen from the right hon. Gentleman the President of the Local Government Board. The analogy of the Municipal Corporations Act was this—that under that Act the burgesses elected the auditor. The Poor Law accounts and the district accounts were officially audited by a district auditor. He hoped the right hon. Gentleman would adhere to the clause as it stood, seeing that it provided for a real and efficient audit of the accounts of the new County Councils.

BARON DIMSDALE

said, he would not press the Amendment.

Amendment, by leave, withdrawn.

MR. F. S. POWELL (Wigan)

said, he had been requested by the hon. and gallant Member for North-West Sussex (Sir Walter B. Barttelot) to move the Amendment which stood on the Paper in his name for the omission of Sub-section (b), which provides that where an auditor disallows or surcharges any sum, he shall not have power to recover it, but without prejudice to any other remedy: and that the sum be a debt to the County Council, and it be the duty of the County Council to recover it, unless within six months after the date of the certificate of disallowance or surcharge a resolution of the County Council remitting the same, and specifying the reasons for the remission, has been passed, after notice of the intention to propose it has been given to every member of the Council. He (Mr. F. S. Powell) thought the Amendment was entirely in harmony with the Amendment of the right hon. Gentleman in charge of the Bill in regard to the accounts. He was afraid that the effect of the clause as it stood would be to encourage laxity of accounts, and to sanction the condonation of such laxity. He hoped that the Council would be required to be very strict in regard to the mode in which the accounts were kept.

Amendment proposed, in page 59, line 23, to leave out sub-section (b).—(Mr. F. S. Powell.)

Question proposed, "That sub-section (b) stand part of the Clause."

MR. RITCHIE

said, that the effect of the proposal of the hon. Gentleman would be that instead of the County Council having power, as provided by the Bill, of disallowing or surcharging, the power would continue to remain in the hands of the Local Government Board. Of course, some difference was made in the matter owing to the withdrawal of the clauses relating to District Councils. He was, however, prepared to say that it was advisable to adhere to this sub-section, by which the County Council would have the power of remitting surcharges in reference to their own accounts. Under the circumstances, and in view of the fact that the whole question of auditing the accounts of the County Council would again come up, as it must do at some not very remote period, he thought it was not desirable to interfere with the jurisdiction of the County Council. The jurisdiction of the Local Government Board, if the Amendment were agreed to, they would still retain in their hands, and also the power of surcharging any particular sum. He would, therefore, accept the Amendment.

MR. TOMLINSON (Preston)

said, he knew of many instances in which the Local Government Board would have been in a position of considerable difficulty if there had not been some discretion given to them in regard to surcharges.

MR. RITCHIE

said, there was a discretion still retained in the hands of the Local Government Board; his hon. and learned Friend did not appear to understand the full meaning of the proposal. At present, the auditors of the Local Government Board surcharged what they thought it desirable and proper for them to do so. An appeal could then be made to the Board by the Authorities who were surcharged. The Local Government Board then considered the whole question, and had to decide whether the surcharge was legal; and, secondly, if it were legal, whether it was expedient to enforce it. It laid with the Local Government Board either to confirm or remit the surcharge; and, under the circumstances, he thought it would be better to retain that power.

MR. STANSFELD (Halifax)

said, he agreed with the view expressed by the right hon. Gentleman. But those surcharges were accompanied by a great amount of trouble; and lengthened correspondence was entered into before the Local Government Board exercised its power of disallowance, an operation which entailed a great deal of friction and irritation in the minds of the Local Authorities who were surcharged. They did not understand why the auditor of the Local Government Board should impose a surcharge, and that then, generally after a long correspondence, the Local Government Board should remit the surcharge. He thought the words as they stood in the Bill would produce a certain amount of friction, and therefore he thought it advisable to strike them out.

MR. RITCHIE

said, he entirely agreed with what had been said by the right hon. Gentleman, but he would remind the right hon. Gentleman that it was with a view of preventing the friction and interminable correspondence which now took place that the Government had undertaken to bring in a Bill last year. The House assented to give power to the Local Government Board to remit those surcharges when it thought fit, without all the circumlocution and correspondence which had previously taken place. He was glad to say that that provision was working well.

Question put, and negatived.

SIR WALTER B. BARTTELOT (Sussex, N.W.)

, in moving to omit Sub-section (c), which provided that where the auditor had disallowed or surcharged any sum or made any report respecting the accounts or the receipts and expenses of the County Council, the Council should cause a copy of the report and a certificate of the disallowance or surcharge, together with the reasons for the same, and if the same had been remitted the copy of the resolution remitting it, with the reasons for the remission, to be printed with the abstract of their accounts, and sent with such abstract to the Local Government Board.

Amendment proposed, in page 59, line 33, to leave out sub-section (c).—(Sir Walter B. Barttelot.)

Question, "That sub-section (c) stand part of the Clause," put, and negatived.

SIR WALTER B. BARTTELOT

further moved the omission of Sub-section (d), which provided that in case of default in compliance with the foregoing provisions of the section with respect to the printing and delivery of the— Said report and copy, the Local Government Board may cause such report and copy to be published in such manner as they think proper, and the cost of the publication to the amount certified by the Board shall be a debt due from the county council to Her Majesty, and the county treasurer and clerk of the county council shall each of them, unless he proves that he was not in default, be liable to a fine not exceeding twenty pounds.

Amendment proposed, in page 59, line 42, to leave out sub-section (d).—(Sir Walter B. Barttelot.)

Question, "That sub-section (d) stand part of the Clause," put, and negatived.

VISCOUNT CRANBORNE (Lancashire, N.E., Darwen)

, on behalf of the hon. Member for the Stretford Division of Lancashire (Mr. Maclure), moved, at the end of the clause, to add the following Sub-section:— (e) Where before the passing of this Act a county auditor has been appointed for a county, he shall be the auditor of the accounts of the county council, and shall for that purpose have and exercise all the powers and duties of an auditor under this section, and any vacancy in his office shall be from time to time supplied by the county council. The noble Viscount said he should like to remind the Committee that in many counties, and especially in the county he had the honour to represent, there was a very important official with a large staff under him who discharged these duties, and was employed not once or twice a-year, but day by day, in revising the accounts and looking over the financial business of all the institutions that were subject to the Court of Quarter Sessions. He was, therefore, a person who occupied a very important position, and he really did not know how the county of Lancashire would be able to get on without a county auditor, even supposing that the district auditors were to be appointed in Lancashire as well as in other counties. In fact, in large and populous counties like Lancashire and Cheshire and several others, it would be impossible to get on without some auditor who belonged to the county and occupied the position of county auditor. He therefore thought it would be better to confirm the county auditor in the new state of things rather than get rid of him.

Amendment proposed, In page 60, at end, add the following sub-section:—"(e.) Where before the passing of this Act a county auditor has been appointed for a county, he shall be the auditor of the accounts of the county council, and shall for that purpose have and exercise all the powers and duties of an auditor under this section, and any vacancy in his office shall be from time to time supplied by the county council."—(Viscount Cranborne.)

Question proposed, "That those words be there added."

MR. RITCHIE

said, he was afraid he could not accept the Amendment moved by the noble Viscount on behalf of his Colleague, the effects of which would be to take out of the operation of the Act, with respect to the audit, any county that had a county auditor at the present moment. The existing county auditors were rather head accountants than auditors; they might be very efficient accountants, but they were not auditors. It was quite possible that those gentlemen would continue to be employed in the work they had hitherto discharged. It was, however, only one part of the duty of an auditor, such as he understood it, to go through the accounts and see that they were properly and accurately kept. Another and even a more important part of the duty which auditors had to perform, was to see whether the payments had been legally or properly made, and that was no part of the duty of the auditor employed by the County Authorities. On the ground that it would be taking away a safe-guard insisted upon in the Bill, he was unable to accept the Amendment.

MR. WHARTON (York, W.R., Ripon)

said, he was glad to hear that the right hon. Gentleman contemplated that the present county auditors were, to some extent, to continue their functions, although there was, at the same time, to be an independent audit. In the county of Durham the county auditor was a very important officer. He had intended to ask the right hon. Gentleman what was to become of the auditors now employed, and he was glad to hear that their services were likely to be retained.

VISCOUNT CRANBORNE

said, that after what had been said by his right hon. Friend, he would not press the Amendment; but, when the Committee reached the 117th clause, he hoped the Government would consider the propriety of providing that the county auditors should be able to continue the duties they now performed, leaving the independent audit provided by the Bill to be performed by officers of the Local Government Board. If the right hon. Gentleman would consider that point, he would have great pleasure in withdrawing the Amendment.

MR. RITCHIE

remarked, that he had nothing whatever to say against the County Councils continuing to employ auditors.

Amendment, by leave, withdrawn.

Clause, as amended, agreed to.

Funds and Costs of District Councils.

Clause 70 (Cost and funds of urban district council).

Clause 71 (Costs and funds of rural district council).

Clause 72 (Power of district council to borrow).

Clause 73 (Audit of accounts of district council) severally struck out.

Local Financial Year and Annual Budget.

Clause 74 (Fixing of local financial year and consequent adjustments).

On the Motion of Mr. RITCHIE, the following Amendment made, in page 63, line 33, to leave out the words "and district council."

MR. WHITLEY (Liverpool, Everton)

said, he had an Amendment on the paper to insert at the end of the clause— Save that where the accounts of any such borough are made up to any other date, they may continue to be made up to such date if the council of the borough send annually to the Local Government Board such statement of their accounts up to the thirty-first day of March as the Local Government Board from time to time require.

THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. RITCHIE) (Tower Hamlets, St. George's)

said, he proposed to leave out Sub-sections 2, 3, and 4, so that the Amendment of the hon. Member would be unnecessary.

MR. HENRY H. FOWLER (Wolverhampton E.)

said, the proposed Amendment came after Sub-section 5. He was afraid it would introduce great confusion to return to that sub-section. He could quite understand the advisability of ending the local financial year on the 31st March; but there were many large boroughs, such as Liverpool and Manchester, which ended the financial year on a different date, and if they were going to alter the date, the change might be a serious matter. Some years ago the financial year was altered in Wolverhampton, and practically the change involved 18 months grace, in the course of 12 months inflicting a serious burden upon the town.

MR. RITCHIE

said, he would also propose to leave out Sub-section (5).

Amendment proposed, in pages 63 and 64, to leave out Sub-sections (2),(3),(4), and (5).—(Mr. Ritchie.)

Question, "That Sub-sections (2),(3),(4), and (5) stand part of the Clause," put, and negatived.

Clause, as amended, agreed to.

Clause 75 (Annual budget of county and district councils).

On the Motion of Mr. RITCHIE, the following Amendment made, in page 64, line 21, leave out "and district council."

Clause, as amended, agreed to.