BASIC CREDIT APPROVALS (Hansard, 13 June 1989)

§ Mr. Tony Banks
I beg to move amendment No. 169, in page 52, line 27, after 'shall', insert 'after consultation with the local authority associations'.

Mr. Deputy Speaker
With this it will be convenient to take amendment No. 170, in clause 47, page 53, line 25, leave out from 'Minister' to end of line 27 and insert 'shall consult the local authority associations on factors to be taken into account'.

§ Mr. Banks
Amendments Nos. 169 and 170 relate to clauses 45 and 47, which set out the method of controlling local government capital expenditure. Clause 45 states that the Secretary of State shall, before the beginning of each financial year, issue each local authority with a notice setting out a credit approval; that is how much it can borrow by various methods. It states that not only the total amount should be specified, but subsection (4) describes the period over which the various loans must be made.
I am seeking try to infuse into the proposals a little consultation, which the Secretary of State should have with the local authorities, which are so dramatically affected by the proposals. We find it extraordinary that the Secretary of State should consider setting out all the financial expenditure of a local authority without consulting the local authority associations.
Those matters were raised in Committee and we were hoping—indeed, we were expecting—an amendment very much like our own from the Government. In Committee we were led to believe that the Secretary of State would welcome an amendment along those lines, and the Minister for Local Government said so in the course of debate on 6 April 1989 which is reported in columns 696 to 698 of the Official Report. If the Minister is not prepared to accept the form of words enshrined in the amendments, will he tell us what form of consultation his proposals will take?

§ Mr. Gummer
The hon. Member for Newham, North-West (Mr. Banks) has put forward a reasonable case for the circumstances outlined. The problem is that we are discussing a range of matters and it would be difficult to consider that it would be sensible to discuss such matters in general as they must be discussed individually.
My officials often discuss with the local authority associations the methodology of distributing housing investment programme and other services block capital allocations. Indeed, the latter are usually distributed on the basis of recommendations made by the local authority associations. There has also been extensive consultation with the local authority associations on the new system of capital finance. We shall, of course, be continuing this detailed consultation, although I hope that, in future, the working papers will not be referred to as "leaks". In particular, we shall be inviting comments on the regulations to be made under this part of the Bill. But on our past performance no one could doubt our willingness to listen to the views of the local authority associations as that is crucial to what we are doing.
Although a local authority will receive one basic credit approval, that approval will cover several services. It will 843 be compiled from annual capital guidelines for each of those services. So it would not be very productive to hold formal discussions on the total level of basic credit approvals. Discussions should focus on the service by service annual capital guidelines which will be the building blocks of the structure. The best course for representations about credit approvals ought to be to Ministers and officials of the relevant service Department. That is what we seek to do.
There are, and will be, many opportunities open to local authority associations wishing to discuss the size of credit approvals with the appropriate service Departments. Obviously procedures vary from Department to Department, but representations can be made at both ministerial and official level. My colleagues and I will be willing to discuss the volume and methodology for distributing credit approvals with representatives of the associations either in a body such as the Housing Consultative Council or in a meeting specially convened for the purpose.
I am happy to give all those undertakings to the House. It is better to do that than to do so within the terms of a narrow amendment. I am not seeking for the hon. Gentleman to withdraw or not to press his amendments in order to avoid the type of consultations that I have mentioned. The opposite is true: I want them to continue on the broadest possible front. I do not believe that there is any doubt that the local authority associations would believe that we have not sought, and will not continue to seek, discussions and consultations on such matters. Those associations do not always agree with what we have decided, or agree among themselves about what we should have decided. Such is the nature of those discussions.
I hope that, given my undertakings, the hon. Gentleman will find it possible to withdraw his amendment.

§ Mr. Tony Banks
I accept what the right hon. Gentleman says about being prepared to listen, but the point is whether any action follows, otherwise one is asking local authorities to participate in a facade of consultations. Consultations must mean that there is the real possibility that Ministers and the officials on the other side of the table are open to persuasion.
What bothers me is that we are talking about a multitude of Departments and I am rather concerned about co-ordination between those Departments if the expenditure cannot be discussed and decided upon in one go. However, having entered those caveats and in view of what the Minister has said, I beg to ask leave to withdraw the amendment.