DIRECTIONS BY THE MAYOR (Hansard, 8 November 1999)

§ Mr. Hill
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 discuss Lords amendments Nos. 458 to 466.

§ Mr. Hill
The way in which the Bill was previously drafted may have resulted in some ambiguity concerning the use of the mayor's powers of direction. Over the summer, my officials held several meetings with representatives of the boroughs and the joint waste disposal authorities, so as to tease out the problems that could exist in the interface between the mayor's power of direction and the contractual nature of waste management. Once the position was clarified, my officials consulted every borough on our proposals, and I am pleased to be able to say that, for the most part, our proposals were warmly welcomed.
This group of amendments clarifies the scope of the mayor's power of direction, setting out how that power can be made to sit with the contractual nature of local authority waste management while retaining mayoral influence over municipal waste management in London. It is important to remember that the mayor's effectiveness in that matter, to some extent, depends, on the influence that he has, through his power of direction, over existing and new contracts. We recognise that most long-term contracts will make allowances for some flexibility and adjustment, which will allow the mayor some room for manoeuvre. However, it was never our intention that the mayor should be able to use the power of direction to require an authority to exercise a so-called "break clause" in a contract.
Such a use of that power could lead to authorities incurring substantial financial penalties and would have serious effects on London's waste management. It would certainly result in an increase in the cost of waste contracts as companies sought to cover the increased financial risk, and it could even result in companies not being prepared to enter contracts because they considered the risk too high. That would have very serious consequences for London.
The amendments clarify the proposals that we set out in the White Paper, which did not go into detail about the mayor's power of direction.

§ Mr. Woodward
We are all grateful for the work that the Minister and his officials carried out in the summer with a view to removing the ambiguity in the clause. However, has the ambiguity been finally removed? Some further clarification is necessary.
The amendment would clarify the mayor's powers with regard to the contractual nature of local authority waste management. However, it still poses more questions. The mayor's specific powers remain unclear and the amendment does not clarify whether the mayor would be obliged to have regard to the cost, practicality and environmental benefit of the waste management in question. What regard to cost would the mayor be obliged to have, and how specifically would those costs be audited and monitored?

§ Mr. Brake
I support the amendments, but wish to express a few words of caution.
788 It is entirely appropriate that a local authority should not be forced to terminate an existing contract. Equally, it is right that a local authority should inform the mayor of the impending expiry of any contract. That is desirable, because there will be opportunities for economies of scale at a London level, for Londonwide recycling projects and for waste-minimisation initiatives.
The mayor will have to tread carefully. The mayor should not use a stick against local authorities such as mine, the London borough of Sutton, which have effective waste-minimisation and recycling initiatives. There would be strong objections if the mayor attempted to overrule the local authority, even if it were perceived to be doing something slightly different from what the mayor desired.

§ Mr. Brooke
I reinforce the views of my hon. Friend the Member for Witney (Mr. Woodward). Obviously, I do not have the Hansard record of how the Minister opened his speech, but my recollection is that he said that there might have been some ambiguity. As I remember it, that ambiguity unquestionably existed when we first considered the Bill, and I recall asking some probing questions. As the text of my probing questions is not of the same importance as those I asked in an earlier exchange with the Minister for Housing and Planning, I shall not bore the House with the date or the column reference in the Official Report.
Because there unquestionably was ambiguity at the beginning, I join my hon. Friend in thanking the Minister and his officials for the work that has been done in the summer, but I want to make certain that any last ambiguity has been squeezed out before we leave the matter.

§ Mr. Hill
Let me—

Mr. Deputy Speaker
Order. I think that the Minister requires leave.

§ Mr. Hill
I beg your pardon, Mr. Deputy Speaker. With the leave of the House, may I say that I am grateful to the hon. Member for Witney (Mr. Woodward) for raising an important issue.
On the issue of cost, I draw the hon. Gentleman's attention to the explanatory note, which clearly states that there are further specific provisions to deal with contracts caught under public procurement regulations. When authorities are seeking offers in relation to the proposed contract under the public procurement procedures, they must generally issue two notices, the first containing general information—for example, as to the nature and extent of services to be provided—and the second advertising the authority's invitation to seek offers. The first is usually general in nature, and the second more specific.
Once the second notice is published, the authority cannot substantially alter the terms without having to go through the procedure again. The amendment ensures that the mayor cannot issue a direction once the second notice has been sent to the Official Journal of the European Communities in order that public procurement procedures are not frustrated.
The mayor must have regard to the best practical environmental option, as set out in the Secretary of State's guidance, to which the mayor must have recourse. The 789 mayor must consult the authority before issuing directions, and take into account a number of considerations in dealing with those matters, of which cost will be one. For the better information of the right hon. Member for Cities of London and Westminster (Mr. Brooke), I undertake to write to him on the matter.
In response to the hon. Member for Carshalton and Wallington (Mr. Brake), may I say that I am aware of the high standards achieved by his borough on waste minimisation. The mayor must in no way impinge upon those excellent standards. Indeed, we would expect such an example of best practice to be widely disseminated throughout the new Authority area.