USE OF SPARE CAPACITY OF COMPUTERS AND PRINTING EQUIPMENT OF LOCAL AUTHORITIES (Hansard, 10 May 1976)

§ The Under-Secretary of State for the Environment (Mr. Guy Barnett)
I beg to move, That the clause be read a Second time.
The clause would enable local authorities to use up the spare capacity of computing equipment and reprographic machinery, installed for their own use, by undertaking work for any persons, including private persons and commercial and industrial concerns, voluntary bodies, and so on, as well as the public authorities for which they can already do work under the Local Authorities (Goods and Services) Act 1970. The clause relates to the capacity installed by the local authority having regard to its own expected needs within the expected life 42 of the equipment, that is, it does not enable an authority to install additional capacity specifically to act as a printing works or computer bureau for the general market.
The clause is an extension of the long-established general power which local authorities have to dispose of surplus stores. Because their data processing activities are growing, local authorities purchasing equipment tend to go, as a matter of common prudence, for machines with more capacity than is immediately needed. They are then faced with a problem of expensive idle machine capacity for a considerable time until their usage of the machine catches up with its capacity. The same occurs on a smaller scale with lithograph, Xerox and microfilm equipment.
Expenditure by local authorities on the acquisition of computers required for the performance of their functions is clearly incidental to the discharge of those functions, and covered by Section 111 of the Local Government Act 1972. It is arguable that the sale of spare computer time is incidental to the economic operation of computers, and is thus incidental to that incidental usage, and so also covered by Section 111. But this would involve applying Section 111 at one remove, and as the spare capacity may initially be a significant proportion of the capacity required for their functions, local authorities do not feel confident that if they did this and the matter come before the courts their action would be upheld. Indeed, they do not want to be in a position where their action was likely to be brought before the courts, and so long as they were acting under powers that were not clearly and certainly applicable to the immediate matters, there would be a real risk of challenge.
I hope that the House will accept the clause on the clear understanding, which is plain from its wording, that it will not involve local authorities in acquiring equipment for use for commercial purposes but will simply enable them to use the equipment more economically by making it available to other bodies and persons when they are not using it themselves.

§ Mr. Keith Speed (Ashford)
This is, I think, the first time that the Under-Secretary of State has taken part in the 43 deliberations on the Bill. I should therefore like to welcome him to our discussions.
There have been a number of changes since we discussed the Bill in Committee. We have a new Secretary of State and a new Under-Secretary of State. Also, we have a new régime in local government. All these changes are acceptable to us, particularly the last. Therefore, I hope that we shall be able to proceed with expedition, because the Bill will be helpful to local authorities throughout the country.
The Under-Secretary of State said that the idea was not that additional capacity should be generated or that general trading activities in connection with photographic reproduction equipment or computers would be undertaken by local authorities. I suppose that it is possible for a local authority, when buying computer equipment or photographic reproduction equipment, deliberately to over-purchase on the basis that it might expect to use the capacity within, say, five or 10 years. I am not sure whether the clause covers that possibility.
I accept the general point made by the Under-Secretary of State. We are not talking about an increase in general trading, or anything of that kind, but there is danger of a local authority saying "We shall ensure that the new equipment is of such capacity that we can take advantage of the provision" and perhaps achieve what the Secretary of State says it is not supposed to achieve. It would be helpful if the hon. Gentleman could reassure us about that matter.
I accept that there should be maximum utilisation of expensive equipment, which may be bought outright or, as often happens, leased. We would not quarrel with that.
I am not quite clear whether the new clause is precedented. Having read the Official Report of the Standing Committee proceedings, the hon. Gentleman will know that whether a clause or amendment was precedented loomed large in the minds of the Committee—even the major amendment which the hon. Member for Leicester, South (Mr. Marshall) added in relation to taxicabs was precedented in the Plymouth Private 44 Bill. We want to make it clear that there should not be long complicated court battles. Could the hon. Gentleman give some reply to the fears and reservations which I have expressed?

§ Mr. Guy Barnett
I thank the hon. Member for Ashford (Mr. Speed) for his generous remarks. I am sure that we shall enjoy speaking opposite one another on local government and other matters, although we shall no doubt disagree from time to time. I accept his remarks in the spirit in which he made them.
The hon. Gentleman expressed natural anxiety about whether a local authority might decide to purchase equipment excess to its foreseen needs on the assumption that it would be used up by letting out the service to other organisations and bodies. The only way I can reassure him is to refer him to the terms of new Clause 1. It says: If a local authority— (a) has provided a computer or printing equipment for the purpose of enabling the authority to perform any of its functions other than functions under this section". That makes it clear that the purpose of such purchase would be for the use of the local authority's statutory functions. So, if a local authority considers such to be the case, that would be the circumstance in which it might purchase a computer, knowing that, after its purchase, for some period—no one can say precisely how long—it might have its excess capacity taken up by other work. But I do not think that a local authority that stated that it was purchasing a computer expecting that there would be excessive capacity for many years to come would be within the spirit of new Clause 1—indeed, quite likely, it would be ultra vires in so doing.
The hon. Gentleman asked whether new Clause 1 was precedented. I am sure that it is. The local authority associations are very anxious to have such aprovision I hope that, with my assurances, the hon. Gentleman will accept the new clause.