PAYMENT OF GRANT TO CONTRACTOR (Hansard, 8 July 1996)

§ Mr. Clappison
I beg to move amendment No. 26, in page 22, line 7, after second 'grant', insert '—
(a) by payment direct to the contractor, or

(b)".

§ Madam Deputy Speaker (Dame Janet Fookes)
With this, it will be convenient to discuss Government amendments Nos. 27 to 29.

§ Mr. Clappison
Clause 39 currently allows authorities to make payment in the form of an instrument made payable to the contractor, or to pay contractors direct. They may do this only if the applicant is informed before approval of the grant that this will be the method of payment. Concerns have been raised about the necessity 58 for flexibility in such circumstances and about problems that may occur when an applicant has not been informed that payment will made in this way, so that subsequently problems arise between the applicant and the contractor. We have reflected, and have introduced the amendments to allow the necessary flexibility.
The clause, as amended, will allow authorities to make payment direct to the builder or in the form of an instrument made payable to the builder, if the applicant has been informed before grant approval is given that this will be the method of payment or may be the method of payment.
To safeguard the rights of applicants who may have disputes with the contractor, subsection (3) gives authorities the power, at the applicant's request, to withhold payment to the contractor in these situations and to make payment direct to the applicant instead.
We believe that the amendments introduce the right balance between the rights of the applicant, the contractor and the authority, and I commend them to the House.

§ Mr. Raynsford
As the Minister said, the amendment responds to concerns voiced in Committee by the Opposition. We were worried about the possible abuse of the system when people try to pressurise contractors to provide them with additional benefits using the threat of non-payment of the renovation grant that the applicant has received from the authority. There have been a number of documented cases of such abuse, and it is right that local authorities should have the discretion to make payments direct to contractors so as to prevent such abuse.
The Government amendment is therefore sensible; we welcome it and are delighted to find that yet another of Labour's ideas proposed in Committee has been accepted by the Government.