CLAUSE 50.—(Power to reduce grants for inefficiency.) (Hansard, 22 February 1929)

§ The LORD ADVOCATE
I beg to move, in page 45, line 1, after the word "health," to insert the words services (including services relating to maternity and child welfare, lunacy and mental deficiency, and the welfare of the blind). This Amendment is proposed in order to make it clear that the Clause applies to welfare services as well as to purely health services.

§ Mr. HARDIE
I beg to move, in page 45, line 8, to leave out paragraph (ii).
1498 This paragraph relates to the expenditure of the council when it is excessive and unreasonable, but there is no definition in the Clause of what is meant by "unreasonable." Something done by the council might be unreasonable in the opinion of the Government, and yet it might be approved of by the local authority. Why should a local authority be subjected to a restriction of this kind without any definite explanation of what the provision really means. This part of the Clause gives an enormous power over the actions of the local authorities, and it may be used in such a way as to prevent them doing many things that they would like to do.

§ The LORD ADVOCATE
Although the Amendment seeks to remove these words altogether, I appreciate that what the hon. Member desires is an explanation of what is meant. To speak of excessive and unreasonable expenditure is to use a very ordinary phrase, and the position is, if 1499 anything, improved by the qualifying words which follow, namely: regard being had to the financial resources and other circumstances of the area. When the financial resources are available for the purpose, the expenditure might be reasonable, although it might not be reasonable in another area where such financial resources were not available. Of course, the power sought is a very important one. The main scheme of the Bill is to pool all the money coming from the central authority and hand it over, leaving a large amount of discretion to the local authorities, without that very close scrutiny which is necessary when there are particular ad hoc grants, if I may use the phrase, as is the case at the present time.
Under the financial provisions of the Bill, the result will be that the money to meet almost 50 per cent. of the total local expenditure in Scotland will come from the central Exchequer, and obviously the central authority must preserve some means of control in order to see that that very large contribution towards local expenditure is properly expended. We do not, of course, want to go into every little individual case; what we want is to make sure that, broadly, the local authorities are carrying out their particular duties in a proper and reasonable way. Although it is the Secretary of State for the time being who has to be satisfied before he seeks to reduce a grant, he must, according to the concluding proviso, make a report to Parliament, so that the attention of Parliament is drawn to it and Parliament itself is the ultimate arbiter. Everyone knows that a, power of this kind is often useful, even although it may never be necessary to put it in operation—it is useful as a deterrent; and in practice it would only be in very extreme and clear cases that such a power would ever be used. There are numerous instances of analogous powers in other Acts, and I suggest that the phrase used here, which is already used elsewhere in the Bill, is the most appropriate phrase to use in the circumstances.

§ Mr. JOHNSTON
The statement of the Lord Advocate might have been more impressive if he had been dealing with a situation in which the local authorities 1500 were receiving percentage grants, but we have been informed that the day of the percentage grant is gradually disappearing, and that a larger proportion of the money paid to local authorities will be in the form of a fixed grant. That being so, there is less reason than ever for interference by a central department in the expenditure of a local authority. If the grant is to be fixed, obviously the central executive wash their hands of it. We have been told that the idea was to form larger areas of administrative control and leave them with greater power, and to abandon pettifogging interference by the central executive.
It is true that Parliament is to confirm the decision of the Secretary of State as to whether expenditure is excessive and unreasonable, but we have all known in our experience of struggles between a local authority and the central department in Edinburgh as to what expenditure was excessive and unreasonable. The payment of a farthing an hour in municipal wages more than the trade union rate could be considered as excessive and unreasonable. It has been held to be excessive and unreasonable by the Minister of Health, who, for that reason, forbids additional loans to Poor Law authorities in England. These wide words "excessive and unreasonable" may be interpreted as meaning almost anything. We are handicapped very badly by the fact that there is a large number of important subjects that we should like to discuss and vote upon later in the afternoon, and, if it were not for that fact, I am certain that we on this side would put up a determined resistance against the retention of these wide and dictatorial powers in the hands of the Secretary of State for Scotland.

§ Sir R. HAMILTON
I beg to move, in page 45, line 16, to leave out the word "whenever."
The effect of this Amendment, together with the three following Amendments in my name—(1), in line 17, to leave out the word "makes," and to insert instead thereof the words "shall not make"; (2), to leave out the words "he shall make and cause," and to insert instead thereof the words "until eighty days have elapsed from the date of his making and causing"; and (3), in line 1501 19, to leave out the first word "the" would be to make the proviso, which now reads: Provided that whenever the Secretary of State makes such a reduction, he shall make and cause to he laid before Parliament a report stating the amount of the reduction, and the reasons therefor, read as follows: Provided that the Secretary of State shall not make such a reduction until eighty days have elapsed from the date of his making and causing to be laid before Parliament a report stating the amount of reduction and the reasons therefor. It will be obvious to the Committee that the object is to give Parliament an opportunity of stating its views on any proposed Order by the Secretary of State before the Order takes effect. The Lord Advocate said just now that the ultimate arbiter in these matters must be Parliament. I agree, and I am inclined to think that these Amendments would make Parliament much more effectively the ultimate arbiter than would the Clause as drafted. As the Clause stands, the Secretary of State would have the power to make an Order for a reduction, and then simply lay the Order, with a report thereon, before the House. Under my proposal, before the Order could he made effective, the House would have the opportunity of expressing its opinion. The powers which this Clause reserves to the Secretary of State are very wide indeed, and the Secretary of State relies very largely on this Clause for bringing recalcitrant authorities up to toe the line. But the Committee will realise that these powers are not to be lightly used. They are very important, and it is very desirable that the House of Commons should not part with its authority over the Secretary of State in this matter, and should not leave it entirely to him to make the Order and then come to the House. I propose that he should come to the House and say what he proposes to do, and let the House say whether it approves or otherwise of his proposed action.

§ The LORD ADVOCATE
I am afraid we cannot accept this Amendment, mainly because it is so cumbrous in form and procedure. The question of a reduction of the grant will, of course, have to appear on the Vote of the Secretary of State, and he will have to justify it to Parliament apart altogether from this report. It was, however, thought ad- 1502 visable that a special report should be made as to the reasons for the reduction, in order to make sure that it should be fully explained for the information of the House, and should not just stand on the somewhat bare terms of the Estimates. I am sure that the hon. Member will agree with me that this is not a power which is likely to be used lightly, or to be used at all except in very rare cases, and I suggest that to have to wait for 80 days for a reduction, when the Estimates may come on before then, is a most cumbrous and inconvenient procedure. For instance, the grant may be due at the time when the reduction falls to be made. What is to happen? He has to pay out the amount and then get back the reduction. It involves a difficulty of administration. I suggest that we have really made sure that the House of Commons shall be fully informed of particulars which led the Secretary of State in the course of his administration to deal in this, I hope, very unusual way with particular authorities.

§ Sir R. HAMILTON
I appreciate the value of the Lord Advocate's remarks, but at the same time I should like to say that I am not confined to the particular form of Amendment or to the 80 days. I suggest that the House of Commons should have an opportunity of expressing its opinion before an Order is made. Under the Bill as it stands, it will not have an opportunity of doing so until after the Order has been made. That is, I think, a point of very considerable substance.