§ Lords amendment:s No. 45, in page 9, line 18, leave out subsection (3).
§ Mr. Stephen RossI beg to move, That this House doth agree with Lords in the said amendment.
§ Mr. RossiThese amendments are the result of views expressed in the House that we should do all that we reasonably can to ensure that funds granted or loaned to voluntary organisations under the clause are properly applied. I wish to express some disappointment on this amendment because it does not go as far as the House indicated it would like the sponsor of the Bill to go. The House will recall that when we were discussing on Report the question of payments of money to voluntary organisations, either by way of grant or loan, the experience of the Greater London Council concerning the Longfellow Road incident was recalled. In that incident moneys were granted to 894 voluntary organisations, insufficient care was taken in the granting of that money, and certainly no scrutiny was made as to how the money was applied. The result was that the public lost considerable amounts of money and no one knows the destination of that money.
In Committee and on Report proposals were put forward to the hon. Member for Isle of Wight (Mr. Ross) and the Government. The first was that voluntary organisations should be required to keep strict books of account of all moneys either loaned or granted to them by public bodies. Those amendments found their way into the Bill and there is provision for the keeping of proper books of account by local authorities.
The second proposal was that we should go further and not only require voluntary bodies to keep proper books of account but require public bodies granting or loaning that money to ensure that they kept a scrutiny on the voluntary organisations to ensure that the money granted or loaned was used for the purposes for which they received it. I understood that that would happen.
The House may recall that on Report I moved an amendment which required public bodies to have due regard to the proper application of the moneys that were received or paid by them. That wording was criticised, I think by the hon. Member for Islington North and Finsbury (Mr. Cunningham), because he felt it was inappropriate language to use. The language was borrowed from legal documents in connection with trustees and the application of moneys in trust. The parliamentary draftsmen were therefore asked to devise another form of wording which would give effect to the concept.
Lords Amendment No. 47 is the result of that attempt and I feel that it does not meet the principle we sought to enunciate in the House. Lords Amendment No. 47 requires only that as a condition of receiving money the voluntary organisations shall give an undertaking to the authorities lending or granting the money about the purpose to which the money would be directed. It also gives the authorities power to require voluntary organisations to certify information regarding the application of the moneys in the form required by the authorities.
895 The trouble is that there is nothing in the amendment requiring the authorities themselves properly to scrutinise the undertakings to ensure that day are obliged to examine public books of account. It may be argued that it is a question of common practice for local authorities and certainly for any borough treasurer worth his salt, where an authority lends money to an outside body, to keep a close eye on the money to make sure that it can be repaid to his authority on the due date.
A totally different situation arises when we are considering grants of money. There is not quite the same incentive on the part of local authority officers to see how money granted is applied. That was precisely the Longfellow Road situation, and a public scandal arose from it.
I understood that it was the wish of the House to introduce wording that would require local authorities to take the trouble to inquire whether the money they gave was used for the purpose for which it was given. The amendment does not do that. It does not go far enough. We are disappointed that in this respect the sponsor of the Bill has not carried out to the full the arrangement that he made with us.
§ Mr. SainsburyI entirely agree with my hon. Friend the Member for Hornsey (Mr. Rossi). The possible abuse of public money has caused concern in London. I am particularly concerned that the situation might rebound on the whole of the housing association movement, which should not be damaged by the behaviour of some bodies which were associated with the movement but were not within it.
The amendment omits the vital requirement in subsection (3) that the local authorities should ensure that the voluntary organisations keep
proper books of account and have them inspected and audited.It is strange that there were five lines in Clause 10(3) when it left us. Now we have 55 lines and yet we manage to leave out the vital words.
§ Mr. Stephen RossHas the hon. Gentleman read subsection (4D) of Lords amendment No. 47? It states: 896
The conditions subject to which assistance is given under subsection (1), (2) or (4) above shall in all cases include, in addition to any conditions determined or agreed under the subsection in question, conditions requiring the voluntary organisation receiving the assistance—Those words are stronger than those in the subsection that is to be removed.
- (a)to keep proper books of account and have them audited in such manner as may be specified, and
- (b)to keep records indicating how they have used the money, furniture or other goods or premises made available to them, and
- (c)to submit the books of account and records for inspection—
- (i)By the Secretary of State if assistance was given to them under subsection (1) above, and
- (ii)by the housing authority or the Greater London Council, as the case may be, if assistance was given to them under subsection (2) or (4) above."
§ Mr. SainsburyI agree that the amendment spells out in full bureaucratic language what is meant by the brief expression "keep proper books". But the original Bill explained that succinctly. We now say the same thing in more words and leave out the requirement that conditions are to be imposed upon the voluntary organisations.
It is not a sufficiently serious matter upon which to seek to divide the House at this stage.
§ Question put and agreed to.
§ Lords Amendments Nos. 46 and 47 agreed to.