New Clause (Hansard, 26 July 1999)

§ The Minister for Local Government and Housing (Ms Armstrong)
I beg to move, That this House agrees with the Lords in the said amendment.

§ Mr. Deputy Speaker
With this, it will be convenient to take Lords amendment No. 8.

§ Ms Armstrong
Throughout the passage of this Bill in both Houses of Parliament the Government have stated that they are committed to ensuring that the legislative framework for best value should be as transparent as possible. The new clause in amendment No. 2 is therefore designed to put the benefit fraud inspectorate's powers on as clear a statutory footing as possible.
The benefit fraud inspectorate's work on the administration of housing benefit and council tax benefit is very much in keeping with the ethos of best value, but the existing powers are framed in very specific, rather than general, terms. We want to make absolutely sure that the inspectorate can contribute its expertise to the best value scrutiny of this very important area of local authority work. This is, therefore, a technical amendment, designed to provide clarity about the extent of the BFI's powers to inspect authorities for the purposes of best value.
Amendment No. 8 is a technical amendment that will ensure that clause 28(2)(b) correctly identifies the provisions that confer powers reserved to the Secretary of State that will not be exercisable by the National Assembly for Wales. The amendment inserts two additional references into clause 28(2)(b). The first is to clause 23, which makes provision for inspection and other arrangements in respect of police authorities. The second new reference is to the new clause included in amendment No. 2, making arrangements in respect of inspection of council tax benefit administration and housing benefit administration. This again is a technical amendment designed to tidy up the Bill, clarify its application and take account of changes that we are making elsewhere.

§ Mr. Waterson
I shall not detain the House. The Minister rightly said that amendment No. 8 is purely technical. Amendment No. 2 is somewhat more substantial, and would have the effect of clarifying that pursuit of benefit fraud is part of the best value process. Lord Whitty made that point in the debate in the House of Lords, stating that we wish to make absolutely sure that this very important area of local authority work is subject to the same best value scrutiny as will exist elsewhere."—[Official Report, House of Lords, 17 June 1999; Vol. 602, c. 514.] Although Conservative Members might have reservations about the implementation of best value and about its centralised and prescriptive approach, all hon. Members agree that it is important to bear down on 72 benefit fraud, wherever and however it occurs. It is clearly right that pursuit of fraud should be placed firmly in the best value regime. We support the amendment.

§ Mr. Sanders
I am worried about the problems encountered by the housing benefit authorities in the verification process. Increasing regulation and checks on claimants have caused significant delays for claimants and landlords. Although the amendment would permit investigation into whether the relevant administration is administering housing benefit correctly, the process of that investigation could impact on claimants and landlords alike. I hope that the Minister will clarify that.

§ Sir Paul Beresford
I, too, intend to be brief and helpful. I echo the point made by my hon. Friend the Member for Eastbourne (Mr. Waterson). All hon. Members are in favour of the benefit fraud inspectorate chasing up fraud, especially in housing benefit, where the problem is notorious. It makes sense to apply best value criteria to the new inspectorate.
However, the hon. Member for Torbay (Mr. Sanders) was right to say that the new inspectorate will look closely at the work of local authorities. That will involve studying how their computer systems are run. Given the recent difficulties with student grants, it is easy to see the difficulties that might arise.
The BFI will be yet another body looking at best value. The most recent edition of the Municipal Journal shows that there are inspectorates for best value, housing, benefit fraud, social services, fire services and for police. Given that there is also the Office for Standards in Education, the Government have set up what amounts to a forum—or collegiate collection—for best value inspectorates that meet twice a year. To my surprise, the Minister had the audacity to be photographed in the middle of the inspectorates' membership. Her colleagues were wise enough to stand further to the back, but some are too tall to remain invisible.
The problem is that those inspectorates cost money. In all the tiers of local government, there are lots of non-productive jobs that cost an enormous amount of money, and the growing list of inspectorates will add to that.
The problem is that the inspectorate, in applying best value, will cost local authorities money. There is no indication of the costs. Perhaps the Minister can explain. To get some feeling for the likely costs, one has only to consider those for some of the other inspectorates. For example, I understand that the chief executive of Newham now heads the best value branch of the Audit Commission on a salary of £150,000 a year.
There is no indication in the amendment or the notes—or in the Minister's speech—of what that inspectorate will cost. One local authority in London estimates that an auditor will spend 150 days a year on best value alone. That will cost £300 a day, which is £45,000 a year—half the cost of a new council house. If we multiply that by 33, for each London authority, we realise that it will mean phenomenal costs for London alone and, for some of the inspectorates, it is for some doubtful benefit. In addition—ignoring those costs of £300 a day, or £45,000 a year, when an inspectorate arrives at a local authority—the authority must also allocate time for council officers to produce reports. Knowing some of the 73 Labour-controlled authorities, when they get a report on best value from the inspectorate, they will produce reports on the reports. There will be meetings, discussions and further reports, all costing enormous sums of money and requiring extra manpower.
I do not expect the Minister to be able to answer me now, but perhaps she could write to me with an estimate of the manpower increase for best value, the extra costs and where the costs of those services—if one can call them that—have been distributed.
The Minister cannot use the basis of the savings. Applying the provision across the average, it will not apply to some authorities, which are good and efficient. The savings will be negative. After all, compulsory competitive tendering saw to that.

§ Ms Armstrong
I thank hon. Members for the constructive way in which they have approached these amendments. The hon. Member for Torbay (Mr. Sanders) asked about the verification framework and the significant delay in the collection of some housing benefit. That is not the issue that we are debating, but through best value we will discover more effectively those authorities that are dealing with housing benefit efficiently whatever the problems, ensuring that payments are made on time and they are reducing fraud.
One of our main aims is to learn about and celebrate good practice and ensure that we spread that. The administration of housing and council tax benefit varies considerably. The hon. Gentleman may also have noticed that housing management and aspects of benefit that cover both the Department of Social Security and local authorities are both part of the beacon council scheme this year, which was intended to spread good practice.

§ Mr. Sanders
I understand what the Minister is saying. My concern is that introducing another tier or inspection may cause further delay. Officers' minds will be turned to the inspection process, rather than the delivery of the benefits regime.

§ Ms Armstrong
I am disappointed by that intervention. As we said in Committee, at every stage in best value, councils have the opportunity to take a hold on matters. The intervention powers that we are discussing under the amendment are there to be used if everything else has failed. The amendment links in the benefit fraud inspectorate, which already exists and has a statutory basis. It is intended simply to ensure that that statutory basis coincides with best value and the best value regime.
Both the hon. Members for Torbay and for Mole Valley (Sir P. Beresford) rightly made considerable play in Committee of the fact that the inspectorates needed to co-ordinate effectively and that there needed to be clarity. Much time is spent on the police inspectorate and how we would ensure that it was still able to continue its work with integrity and fit into best value. The amendment simply deals with the benefit fraud inspectorate and its statutory basis. It will ensure that that basis none the less allows and enables it to be involved in the best value regime. We are not talking about another tier, but about carefully ensuring effective co-ordination and co-operation.
I understand the hon. Member for Mole Valley wanting to make fun of a number of matters. I heard him talk enviously about the reshuffle and I know that he wishes 74 that he was part of the speculation. We have set up a forum so that we can ensure that each inspectorate co-operates effectively and is planning its programme of work so as to ensure that local authorities do not face huge additional burdens because of inspectors arriving all at the same time and so forth. The amendment will ensure effective co-ordination.

§ Sir Paul Beresford
I understand the Minister's reasoning and point of view but will she agree to answer in writing my question on costs and increasing manpower? I realise that it is impossible for her to answer it today.

§ Ms Armstrong
In Committee I promised that we would produce an effective regime for the payment of the inspectorate, which will be a balance between Government grant and contributions from local authorities, and I shall fulfil that promise. That will be the way in which we will measure the additional contribution that local government will have to make. As the hon. Gentleman conceded in his speech, there will none the less be savings. On that basis, I conclude my remarks. Lords amendment agreed to.