POWER FOR AUTHORITIES TO INCUR ExPENDITURE TO REMEDY INJUSTICES CAUSED BY MALADMINISTRATION (Hansard, 14 July 1978)

§ Mr. Ivor Clemitson (Luton, East)
I beg to move, That this House doth agree with the Lords in the said amendment.

§ Mr. Speaker
With this we may take Lords amendments nos. 2 to 5.

§ Mr. Clemitson
The purpose and effect of the amendments are twofold—first, to extend the scope of the Bill to Scotland, in pursuance of an instruction passed in this House on 17th February this year and, secondly, to provide that expenditure incurred by local authorities under the Bill will count as relevant expenditure for rate support grant purposes. This was enabled by the passing of a money resolution to that effect in the House on 11th May.

§ Mr. Speaker
Privilege is involved in this amendment, but it is covered by a money resolution already passed by the Commons.

§ Mr. Geoffrey Finsberg (Hampstead)
I am not happy about accepting Lords amendment no. 2. I shall explain why I think that it is a mistake. We have reached the position in which, in certain circumstances, local authorities are enabled to make some form of payment where maladministration has been found, but it is not clear under which powers they should operate. The Bill is welcome. It does not go far enough in some respects, but it goes too far in this respect.
I shall need to be convinced before accepting the amendment, because it is extremely important that the remedy available should fall on the authority that has committed the maladministration. My reading of the Lords amendment is that 1970 the expenditure would qualify for support under the rate support grant. That means that the general body of taxpayers would be making its small contribution to bailing out the local authority that had committed the act of maladministration. I believe that the cost should fall completely on the local authority that commits an act found by the Commission for Local Administration to be maladministration.
When the Bill was going through, there must have been consultation and advice must have been received. The preamble to the Bill makes clear that it gives effect to a recommendation from the Commission for Local Administration. It is no secret that I have on today's Order Paper a Bill which seeks to plug an admitted hole in the present ombudsman system for local government. One reason why Government support is not being given to my Bill is that it has not come via the considered view of the Commission.
The Bill that we are debating comes from a consideration of the Commission. It must have been satisfied to agree with clause 1(2) that: Expenditure incurred by virtue of subsection (1) above shall not be relevant expenditure within the meaning of section 1". The House is entitled to a detailed explanation from the hon. Member for Luton, East (Mr. Clemitson). So far, we have had no explanation.
This is an important issue, and a matter of principle. Some of the cases of maladministration that have given rise to the Bill have come about as a result not merely of normal maladministration, but of sheer incompetence and in some cases an attitude of mind, which comes through in some of the reports of the Commission, of officials who could not care less about members of the public. The officials seem to take the view that members of the public are annoying because they disturb the officials' routine and it seems that the officials cannot be bothered to get out the right files.
In those circumstances, responsibility must lie upon the local authority for the actions of its officials who have given rise to a charge of maladministration. In the case of maladministration by, for example, the London borough of Lambeth, why should the ratepayers or taxpayers of the London borough of Camden have 1971 to pay anything at all? Why should the ratepayers and taxpayers of Camden have to pay for the maladministration of, say, the London borough of Greenwich? It does not seem right.
I do not think that the Bill will operate fairly if we remove the safeguard that the hon. Gentleman was perfectly happy with when the Bill was in its original form. It seems that it did not give rise to any consideration when the Bill was vetted by the Department of the Environment. However, at this stage there is an attempt to accept the Lords amendment.
1.30 p.m.
I am much in favour of the principle behind the Bill, but only if that principle is fairly applied. In this instance I am not satisfied that there is fairness of application. I could expand on the argument by quoting some examples where in my view it would be wrong to take advantage of the omission that is sought. I shall not do that, as it would merely be repeating the basic argument and the basic principle that I have set out. Without a good explanation, I shall seek to divide the House on Lords amendment no. 2.

§ Mr. Clemitson
The hon. Member for Hampstead (Mr. Finsberg) says that I and the local government commissioners must have been happy with the Bill in its original form. I shall explain why the Bill was written in such a form originally. Subsection (2) originally provided that expenditure incurred by local authorities under the Bill would not count as relevant expenditure for rate support grant purposes. That limitation was included for procedural reasons. It was included because I was advised that in accordance with Standing Order No. 91 it was not possible for a private Member to introduce a Bill the main purpose of which was to create a charge on public funds. On the basis of that advice it seemed that the subsection had to be included in the original Bill.
Subsequently a money resolution was tabled by the Government after Second Reading. The resolution was agreed to by the House without a Division. There were representations on the point made to the Government by the Association of Metropolitan Authorities and supported 1972 by the local authority associations. The Government formed the view that local authority expenditure under the Bill should count as relevant expenditure for rate support grant purposes. As I have said, a money resolution was tabled and approved by the House on 11th May.
I agree that that explanation does not meet the point of principle advanced by the hon. Gentleman, but to put the matter in perspective the amounts involved are not large. Between 1st April 1974 and 31st March 1978 the expenditure by local authorities in England sanctioned for these purposes was £17,000. The expenditure by Welsh authorities was only £4,600. We are not talking about large sums. I agree that if the hon. Gentleman feels that it is a matter of principle it does not matter whether it is £20,000 that is involved or £20 million. I agree that that consideration is irrelevant. I merely offer that information and suggest that it brings the matter into perspective. Apparently the metropolitan authorities and the various associations of local authorities are happy with the change proposed by their Lordships.

§ Mr. Geoffrey Finsberg
I appreciate that the AMA is happy. It will be expecting the taxpayer to pick up part of the tab for the cost. If the reverse were happening, I doubt very much whether it or the Association of County Councils would be happy to pick up part of the tab. Neither would be happy if the Government said that part of the costs incurred by the parliamentary ombudsman should fall on the rates. I ask the hon. Gentleman to think again. Does he not agree that it would be wiser to meet the point of principle and to ask the House not to accept the Lords amendment?

§ Mr. Clemitson
No. I am satisfied that the bodies representative of the local authorities have been able to make their views clear. The Government tabled a money resolution to overcome the difficulty that had been created earlier by the Standing Orders. The opportunity to raise the point of principle was present when the resolution was put before the House. No argument was raised, and the resolution was passed by the House without a Division. I submit that we should accept their Lordships' amendment.

Division No. 271	AYES	[1.38 p.m.
Armstrong, Ernest	Hamilton, W. W. (Central Fife)	Pavitt, Laurie
Atkinson, Norman (H'gey, Tott'ham)	Harrison, Rt Hon Walter	Richardson, Miss Jo
Barnett, Guy (Greenwich)	Heffer, Eric S.	Spearing, Nigel
Bates, Alf	Huckfield, Les	Stallard, A. W.
Booth, Rt Hon Albert	Hughes, Robert (Aberdeen N)	Stott, Roger
Butler, Mrs Joyce (Wood Green)	John Brynmor	Thomas, Mike (Newcastle E)
Cocks, Rt Hon Michael (Bristol S)	Johnson, James (Hull West)	Walker, Harold (Doncaster)
Cox, Thomas (Tooting)	Luard, Evan	Ward, Michael
Davis, Clinton (Hackney C)	McNamara, Kevin	Weetch, Ken
de Freitas, Rt Hon Sir Geoffrey	Madden, Max	Wilson, Rt Hon Sir Harold (Huyton)
Edwards, Robert (Wolv SE)	Mikardo, Ian
English, Michael	Moyle, Roland	TELLERS FOR THE AYES:
Fitt, Gerard (Belfast W)	Palmer, Arthur	Mr. Ivor Clemitson and
Fraser, John (Lambeth, N'w'd)	Parker, John	Mr. Norman Buchan.
Golding, John
NOES
	Body, Richard
	Hunt, John (Ravensbourne)
	TELLERS FOR THE NOES:
	Mr. Michael Neubert and
	Mr. Charles Morrison.