CLAUSE 9.—(Expenses.) (Hansard, 30 November 1936)

§ Sir J. LAMB
I beg to move, in page 13, line 26, to leave out Sub-section (2).
I have also an Amendment to leave out Sub-section (3) and, if I may, I will refer to both Amendments. I have put them down because there is a strong feeling among county councils about this particular question. Sub-section (2) of Section 86 of the Local Government Act, 1933, deals with the payment by county councils of sums exceeding 250. They can only be paid on a resolution passed by the council after a resolution has been submitted to it by the Finance Committee. Sub-sections (2) and (3) of Section 184 of the same Act regulates payment out of the county fund, and Subsection (2) of Section 187 deals with payments out of the general rate fund of a borough. These provisions of the 1933 Act have been looked upon by councils as their financial security, but Clause 9 of this Bill proposes to remove them, and I would like to know what procedure the Minister is proposing to put in their place. I do not want to make any aspersions on the integrity of the officials of county councils, but it is our duty in a Bill of this description to make such provision as will enable us to deal with those who are not as honest as the present employés. If the county accountant is asked to pay a cheque, on whose authority is it to be paid? Is he to pay it after the account has been initialled by the road surveyor of the county? Suppose a bill is presented to the county accountant for payment on the certificate of the road surveyor. The account may include an item which may or may not be put down as an extra, but which should be part of the contract. We know that after a contract has been made extras are sometimes added and the county accountant, without having some procedure of inspection or some safeguard, would not 932 be able to say whether that item was accurate. Later, when the account goes to the Ministry some official may say that the account is not correct and that a part of it which had been paid ought not to have been paid. Who is to indemnify the county for payments which have been made incorrectly in this way? I can see nothing in the Bill which replaces the safeguards of the 1933 Act.

Captain HUDSON
The reason we are proposing to alter the procedure by means of this Sub-section is that we consider that the present machinery is too, complicated for the circumstances which will arise after the transfer of these roads to the Minister. Money will be paid by the county council as agents and it will be paid in advance. These Sub-sections have been inserted after discussion with the County Councils Association, who share the view of the Minister that the machinery which has been devised in the past for the safeguarding of local ratepayers in the Local Government Act, 1933, is inappropriate in connection with an agency transaction undertaken as this transaction will be. The costs incurred by the county councils for the Ministry of Transport will be incurred after the Minister has delegated certain of his functions to the councils and has authorised expenditure on the basis of an approved estimate, and we feel that the application of this machinery will only result in unnecessary delays and, in the circumstances, would provide no useful or necessary safeguard either to the Minister or to the council. My hon. Friend the Member for Stone (Sir J. Lamb) asked what is to be put in its place. Surely the answer to that is that the council will in each case adopt a suitable system of internal audit to deal with these matters. As I said at the beginning of my remarks, the system under the Local Government Act of 1933 is cumbersome and is not necessary in the present circumstances. I am perfectly certain that no council will have any difficulty in devising machinery for actually paying out. In view of the fact that the money will be paid in advance under a proper estimate, we feel that these two Sub-sections, which leave out that cumbersome procedure, are necessary, and that the councils themselves—and that is our view after discussing it 933 with them—will have no difficulty in devising machinery to deal with their own individual cases.

§ Sir J. LAMB
I am much obliged to my hon. and gallant Friend for his explanation, but I must say that I am not very well satisfied with it, because if it is so easy for the county councils to devise machinery under which these payments are to be made and safeguarded how is it that we cannot have it in the Bill or have agreement among the county councils as to the machinery they are to have? I do not wish to contradict the hon. and gallant Member, but I do not think the County Councils Association has said that they do not want this. What they did say was that they thought the present system was too cumbersome, but they did want to know what was to be put in its place, and up to now we have no information of what the procedure is to be. If the Minister thinks it; is so easy for them to take these necessary precautions against possible fraud, and is willing to indemnify the councils against any such loss, personally I have no objection to his leaving it to them. I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Motion made, and Question, "That the Clause stand part of the Bill," put, and agreed to.