HL Deb 28 June 1963 vol 251 cc451-65

11.34 a.m.

Order of the Day for the Second Reading read.

VISCOUNT COLVILLE OF CULROSS

My Lords, whereas just now I was presenting to your Lordships a simple Bill for Scotland, I have now a complicated one for England and Wales. Each of the clauses in this Bill is on a different subject, and I think your Lordships might be forgiven if you thought at first sight that it was something of a packet of all sorts. Although the outside of some of the items looks a little sticky and indigestible, I think your Lordships will find that they mostly have soft and palatable centres.

There are two themes which go through the Bill. The first is apparent from the Title, in that it deals with local government financial provisions. But the second, which is, I think, an important theme, is that they are all aimed at giving local authorities rather more scope to run their own affairs in the most effective way, with the minimum of prohibition and control from Whitehall. There are some limitations which will be found in the clauses or can be provided by general regulations, and some of the existing requirements for individual sanctions or consents will be removed. In fact, I believe that this Bill will cut out a lot of unproductive time and paperwork—the sort of thing whereby sixpence is spent in order to see that threepence is not wasted. But, on the whole, these provisions will not provide for extra expenditure out of the rates. Although local authorities will be able to spend limited sums on some reasonable purposes, they will be able to do so without the necessity, which has hitherto existed, for them to get permission from the Minister on mere trivialities in so many cases.

The Bill does not lay any new duties on the local authorities; it gives them no new powers of compulsion over the citizen. It has been welcomed, except for Clause 3, by all the local government bodies, and warmly welcomed in another place when my honourable friend the Member for Hexham introduced it. I think, therefore, your Lordships might approach it with what I hope would be a favourable mind. Nevertheless, I think that I ought to explain at a little length its somewhat complicated provisions, so that your Lordships should understand them better than I fear you will merely by reading the clauses.

Clause 1 does away with the need for cumbersome procedure which at present has to be followed to enable local authorities to pay their members' expenses when they attend conferences and meetings on the functions of the authority. There has been enormous growth over recent years of the scope of local government services, and it is vital that members, as well as officers, should be able to go to the conferences of the specialist bodies, to learn the latest developments in the various fields and how these things are being dealt with by other authorities. Although under the law as it now stands local government authorities have power to pay expenses of sending representatives to conferences, they can do so only if the conference is called by a body which consists purely of local authorities. This has been the law since 1933. It excludes, of course, all the main associations dealing with housing, town planning, highway construction, water supply, sewage purification, many of the road and rail services and similar matters; clean air, parks, burials, and an enormous number of other important functions of local authorities. The effect of this limitation has been to exclude payment of expenses for members to attend conferences dealing with all the important main functions of local government except education (for which there is a special provision in the Education Act), because, although in many cases these important bodies largely consist of local authorities, if there is any other membership, the expenses cannot be paid without the sanction of the Minister. This has been given by special request in the past, but this clause will, I think, overcome the difficulty caused by local authorities' having to ask each time and obtain special sanction under the Local Government Act, 1933.

There is, of course, the other side to this question. I know that your Lordships would not wish such powers and freedom to be used in an overenthusiastic way, and the purpose of subsection (3) of Clause 1 is to grant the necessary control so that these things are not abused. There are two safeguards. One is that the provision is constructed so that the amount of the allowance to members is limited to the rates laid down by the Minister in regulations for other council duties; and your Lordships can see a full and detailed list of the expenses which can be paid under the Local Government (Members' Allowances) Regulations, 1948. This is a comprehensive list and keeps a close eye on the whole expenditure. It does not lay down at all extravagant rates.

The other safeguard is that the clause is simply an extension of the provision in the 1933 Act, which means that it is effective only to the extent that it is brought into operation by Minister's regulations, and these will come before Parliament under the Negative Resolution procedure. One of the things these regulations will probably do (perhaps my noble friend Lord Jellicoe could say something about this) will be to limit the number of members whose expenses can be paid, because under the present system, normally, only two members from one local authority can attend these conferences and have the expenses paid by their authority.

Clause 2 relates to a point that was raised in another Private Member's Bill in another place, but was withdrawn when it reappeared in the Bill of my my honourable friend the Member for Hexham. The point about this clause is that under the Local Government Act, 1948, the local authority are empowered, with the Minister's consent, to contribute to the bodies which provide services for the benefit of the authority's area, or its inhabitants, but they can do this only where the activity of that body is carried out in the area of the contributing authority. There may be a voluntary body which serves the area of several authorities in such matters as old people's workshops, convalescent homes, museums, and so on. At present, it is only the local authority in whose area the particular activity is carried on which can contribute: others who also get the benefit of the work cannot do so. This is put right in the Bill.

Clause 3 raised a certain amount of trouble on Report stage in another place. It was inserted there, and was not in the original Bill. It gives power to the local authorities to contribute to associations, not so much of officers but of members, of councillors, of the authorities themselves, if the body to which they wish to contribute is approved by the Minister. There is, in fact, an embryo or an infant body which has recently been set up which will give a certain amount of useful assistance to councillors, and I think it would help them to be educated in their duties as councillors. It is still in a very early stage, and the honourable Member for Islington, North, who is a vice-president, and very keen that the power should be in the Bill, says, nevertheless, that he does not think this body is ready for approval. Nevertheless, there is power in the Bill, if such a body should come into existence and be approved by the Minister.

Clause 4 is another adjustment to an existing power. Under the Local Authorities (Expenses) Act, 1956, councils may incur expenditure on the reception of distinguished visitors and persons representative of local government in other countries. They may also pay the expenses of their own members on official courtesy visits abroad. It was an Act to facilitate the "twin town" links, which are very common and, I think, beneficial in this country; but it would also be useful on many occasions for officers of local authorities, as well as members, to go on these expeditions and compare notes with their opposite numbers abroad. This the clause now allows to be done, although I am bound to say that it does not produce the same freedom that many local authorities abroad have when they send their delegations here. Nevertheless, it is a step in the right direction.

Clause 5 concerns a technical point and, unless your Lordships have any questions on it, all I will say is that it is to clear up a doubt which existed as a result of the drafting of the relevant section in the 1933 Act. But I will try to answer any questions that your Lordships may wish to raise on it.

Clause 6 is a modest provision to deal with the limitation of local authorities' powers: that they can incur an item of expenditure only where they have statutory authority or where the Minister allows them to do so. This applies even to very small and, perhaps, insignificant items. In the main, the smaller the item the less reason there will be to provide general powers, either by Public or Private Act. There are any number of things which will come into that category, but which will be well worth doing in individual cases by a local authority. I have a variety of examples which might appeal to your Lordships. For instance, the erection of warning posts and expenditure on life-saving patrols at seaside towns; the fencing off of dangerous places where children might fall down and hurt themselves; floodlighting of war memorials; prizes for allotment and garden competitions; and—another quite important little thing for a small place—contributions towards the cost of maintaining unremunerative public telephone boxes in villages.

This clause gives a general power to incur that sort of expenditure for the benefit of the inhabitants of the area, and makes it unnecessary for special or public legislation to be passed. In fact, some of these things can be done already with the Minister's sanction, but there are other little points—like the fencing of dangerous places so that children should not fall into them—where the Minister has not hitherto been able to sanction expenditure. Under this clause the work can be done. There will be little new expenditure—and I hope your Lordships will not think that that is too bad a thing—because for the parish councils there is a limitation of one-fifth of ld. rate, and for other local authorities a 1d. rate. This compares modestly with their powers to spend under other individual specialised enactments. For instance, they can spend up to a 3d. rate to advertise the attractions if they are a health resort or a holiday town; they can spend a 2d. rate for net loss on allotments, and a 6d. rate for net loss for helping the arts, music and drama. It is very seldom that they spend anything like that amount. This general power to spend this small amount of money has existed in Scotland for fifteen years, and it has proved very beneficial, although the Secretary of State has had to give his consent to its use.

There are, of course, considerable safeguards. Since there is to be public inspection of accounts, a separate account will have to be kept. There is also the very important provision that the power cannot be used where the authority have a similar power to do that sort of thing under another Act but subject to some limitation or to some consent. If they wanted, for instance, to send more people to a conference than they could otherwise do under one of the several clauses in this Bill, or under the existing law, they could not then use the ld. rate under this clause to do what they could not do otherwise. I think that should be a sufficient safeguard against any abuse of this power.

Clause 7 deals with the power of a local authority to issue bonds. Up to now, they have been able to borrow for capital purposes but only by mortgage, stock, debentures or annuity certificates. The last two are very seldom used. Metropolitan borough councils covered by this clause are restricted to borrowing by way of mortgage. On the other hand, there have been over 150 Private Acts to allow local authorities to issue bonds, and recently the Derbyshire County Council attracted £2¾ million from the investing public under a Private Act for this purpose. So this new way of borrowing is now added generally for all the local authorities mentioned in the clause, that is to say, county councils, county boroughs, county districts and metropolitan boroughs—so long, I suppose, as they last. The power will also apply to the other statutory bodies—such as water boards, for example—to whom the relevant provisions in the Local Government Act have been applied by special Statute.

Schedule 1 lays down the conditions of these bonds, and there is power to make even more specific provisions by regulation if necessary, and I have no doubt that the Minister would do so. Clause 8 is the one which I, personally, found the most difficult to grasp, but it seems to me to be fully justified, when eventually one finds out what the point of it is. This is an extension of the existing power of local authorities to suspend for up to five years payments into sinking funds for the repayment of loans for the construction or alteration of works for their revenue-producing undertakings. This clause extends the power to other purposes to be specified by the Minister and, in particular, to the purchase of land which is either initially acquired or is later appropriated to one of these purposes which the Minister says it should be. It also enables the authorities to borrow to pay the interest due on the loan while the suspension is in force, and power can be exercised for any period up to five years, but not, of course, during the last five years.

As I understand it, the difficulty is this: that you have a loan for a large operation which does not in the first stages produce anything in the way of revenue to pay the interest on the loan, and, at the same time, under the law as it at present stands, in addition to getting no return, you pay the interest and you also have to pay the amounts into the sinking fund for the eventual repayment. This places a very heavy burden on the rates until the revenue comes in, whereas later the revenue comes in and it would then be very much easier, if it were thought fit, to put bigger funds into the sinking fund, to make up for the period during which none has been provided. This is what the clause will allow to be done; and I think, again, that the safeguards are fairly solid. But of course, it does not follow that all local authorities will want to do this. There may be some, but, on the other hand, it is not a panacea for all circumstances, because it means the money has to be paid at a greater rate later when the suspension stops. Nevertheless, I think the Minister will be able to deal in general regulations under this clause with the purposes for which the power of suspension is obviously right, and probably it would be correct if he dealt also, as the clause provides, with the ad hoc case which does not fall within the general specifications. I hope that my noble friend will also say, when he comes to reply, something about this, because it seems to be an important point.

I should also say that there is the less common case where a loan has been repayable by instalments, and in this case there would be no power to the local authority to dispense with the need to secure the lender's agreement to any 'alteration in the repayment terms so that the lender will not, in any case, be prejudiced. The power may also be used by those other authorities I have already mentioned who have powers to borrow money under the provisions of the Local Government Act given to them by special Statute.

Clause 9 deals with capital funds and the renewal and repairs funds. These are popular with local authorities and they provide a useful means of financing capital schemes of moderate size as an alternative to borrowing. Again, many local authorities have power under Local Acts which they have from Parliament, and there is general power contained in the Local Government (Miscellaneous Provisions) Act, 1953. But the funds under the 1953 Act cannot be applied to education. At that time it was a grant-aided service and the use of capital funds for education could have resulted in abuse of the grant arrangements; but now education comes under the general grant, and so it would, I think, be a great advantage to have power to use these capital funds for educational purposes as well; and that is what the clause provides.

Clause 10 empowers local authorities to pay the unexpended balances of loans in ways which I think they would almost certainly be allowed to do now but which would require individual sanction from the Minister. Again, this is bound to save a lot of typing, correspondence and expense both at the local government and Ministerial ends. Clause 11 provides for similar relaxation where boundary changes have taken place in areas of local authorities, and I have no doubt that as the 1958 Act and the Commission set up under it gradually produce boundary changes and the changes of status in authorities that is going on now, this should be rather an important clause.

The rest of the clauses in the Bill and the Schedules are really machinery and I do not think any difficulty will arise under them. But if any of your Lordships wish to ask questions about them I shall be happy to do my best to answer them. I must apologise to your Lordships for being so long on this, but it is a complicated measure. I hope I shall be forgiven for trying to explain it in detail and that this will help your Lordships to give it what I hope will be an easy passage through this House. I beg to move.

Moved, That the Bill be now read 2a.—(Viscount Colville of Culross.)

11.56 a.m.

LORD CHAMPION

My Lords, this appears to me to be one of those Bills to be found in the pigeon-holes of all the Ministries, waiting for some opportunity to be introduced. Clearly, no such opportunity has arisen and a Private Member has undertaken it. But I regard it as being no worse for that fact and certainly, had a Government Front Bench speaker introduced it either in the other House or here the Bill could not have had a better exposition than that which we have enjoyed this morning. The noble Viscount, Lord Colville of Culross, apologised for the long time he took to explain the Bill, but, after all, it is an important Bill and one which I personally welcome. I must admit that when I was a member of a local authority I thought that the existing law on this subject of expenses paid to members was unnecessarily restrictive. These councils are responsible bodies and, of course, have to watch their ratepayers' money, but there are certain conferences, and so on, the attendance at which provides information which otherwise could not be obtained. For that reason I certainly welcome this Bill.

The only other point I would make is that I rather like this expansion of the general power to borrow by means of bond. I think this is useful and should be within the power of local authorities without having to go to Parliament and obtain a Private Bill for this purpose. It is right, I think, that there should be an extension of this power to all authorities, always provided that the necessary safeguards are included. With those few words I, as an ex-local government man, certainly give my personal welcome to the Bill, feeling that it will be beneficial to local authorities; and I would end by congratulating the noble Viscount upon the way in which he introduced it. I hope he will have an easy passage for the rest of the Bill.

11.58 a.m.

LORD AMPTHILL

My Lords, I rise to support my noble and learned friend Lord Colville of Culross in moving the Second Reading of this Bill. I have always advocated decentralisation of responsibility as much as possible, and I think that this is just as important in local government as it is in industry. I am particularly attracted by this Bill because, in my capacity as a member of the Council of the Industrial Welfare Society and of the Executive Committee of that body, I have found great difficulty in getting people from local authorities to attend the numerous courses and lectures which we run and which we believe could help the officials and staff of local authorities. Also, we have evidence from the local authorities themselves that they would like to send their people to the courses that we run. I think that this Bill, if I have understood the very clear explanation of my noble friend, will enable them to do so. Therefore, I welcome the Bill.

11.59 a.m.

THE MINISTER OF STATE, HOME OFFICE (EARL JELLICOE)

My Lords, my first duty is to echo the congratulations which my noble friend Lord Colville of Culross has received on sponsoring this Bill, and I think my second duty is to congratulate the Bill on its sponsor. It is, I think, a good Bill and it has certainly attracted a very good sponsor. This fair bride, if I may so term the Bill, has, I think, been very lucky to go up the aisle on the arm of my noble friend, accompanied by two such expert bridesmaids, if I may so term the noble Lord, Lord Champion, and my noble friend Lord Ampthill. As a result of my noble friend's having covered the ground so fully and clearly I have, I am glad to say, very little to do, but I feel that I should straight away make it clear that the Government, for their part, are happy that this Bill has received a warm welcome not only here and in another place but also from the expert local authority associations, and we hope it will commend itself to your Lordships.

I also feel that perhaps there are one or two clauses which I should very briefly embroider, particularly as my noble friend Lord Colville of Culross has asked me to say a word or two on one or two parts of the Bill. In the first place there is Clause 1, which, as your Lordships now know, extends the power of local authorities to pay expenses incurred by their members in attending conferences and meetings. The season for conferences of this sort is already upon us, and we shall soon see the papers filled with reports of the conferences of this and that association at Blackpool or Brighton. Some of us may perhaps wonder whether all these conferences always serve a useful purpose. I myself am convinced that most of them do. But, he that as it may, some of your Lordships may conceivably have had some suspicion lurking at the back of your minds that this Bill could lead to some vast increase in conference junketing. If any of your Lordships do harbour that suspicion, I think I can assure you this will not be the case.

The new clause covers by and large much the same ground as the existing Section 228 sanctions which my right honourable friend gives. Its practical effect, therefore, is not to extend confer- ence-going by local authority members but merely to replace the detailed, makeshift and often grandmotherly control through Whitehall, by much more economical and decentralised control at the essential points by regulations. The present regulations, I gather, provide that for most conferences a local authority may not pay the expenses of sending more than two members to any one conference. The Department's general practice on the Section 228 sanctions for conferences outside the terms of these regulations made under the 1933 Act has been to sanction attendance by one member only.

The scope of the new regulations will, of course, have to be discussed with the local authority associations, but I think it is likely that they will again limit the number of members who may attend at any one conference, perhaps in much the same way as is now done. They could, of course, exclude certain types of conference altogether if that were held to be desirable after consultation. In any event, I think they are likely to provide for closer control over attendance at conferences abroad, a point which those of your Lordships who may be suspicious of foreigners and their very odd goings-on may find reassuring.

I myself am quite sure, in any event, that this new clause will represent a great improvement over the present practice whereby the attendance of council members at almost all conferences has to be specially sanctioned. In principle this seems to me quite wrong and a misuse of Section 228. It means that a lot of the staff of the Ministry are kept employed on totally unproductive and unrewarding work, and in any case it strikes me as undignified to subject responsible local authorities to this type of detailed control over what are primarily their own affairs. I should like, therefore, if I may, to commend this particular clause very warmly to your Lordships' House.

The next clause on which I should like to touch, again briefly, is Clause 6. This, as my noble friend explained, is a relatively modest prevision providing local authorities with a general power to incur minor expenditure for the benefit of their locality or its inhabitants. He also explained the present position, and that this limitation applies only to very small and insignificant types of expenditure. He mentioned the fencing off of dangerous places for which there is no present cover. I was glad he raised that point, because some of your Lordships may remember a rather tragic incident some years ago when some boys playing by the banks of the Manchester Ship Canal near Warrington slipped in. I believe that at least one boy was drowned. The local authority concerned, the Warrington Borough Council, then very properly decided that they should fence the canal at this point in order to avoid any repetition of this tragic incident. But they found they did not have power to incur this obviously necessary and very small expenditure. They had to go to the Ministry, and it was only after a great deal of head scratching by all concerned that it was possible for them to incur this expenditure, and then only by stretching the Section 228 special sanctions further than they properly should have been stretched. This new clause will put right this sort of absurdity, and again I commend it warmly to your Lordships' approval.

The only other clause I should like particularly to refer to is Clause 8. Like my noble friend, I found the drafting of this clause very tricky, but I think the meaning is quite clear. It will give local authorities a power to suspend the annual provision for the repayment and to borrow for the payment of interest on certain loans. I think this fills a need felt in local government circles—and not only in local government circles—for some time past. I regard this particular clause not only as important but also as having a particularly soft and palatable centre, to echo my noble friend's phrase. I might perhaps remind your Lordships that in a debate on urban central redevelopment in another place last year the then Minister of Housing and Local Government (whom we shall soon be welcoming to this House) said [OFFICIAL, REPORT, Commons; Vol. 657, col. 1721]: I think that a good case has been made for enabling local authorities carrying out redevelopment schemes to defer repayment for an initial unremunerative period. This means legislation, and I can give no undertaking when that will be possible, but I accept the principle of being able to do this in this field as it can be done in certain other fields. When I was at his Ministry, at the time, this was a matter which to some extent came my way, and I am delighted it has been found possible to incorporate this particular provision in the Bill. Of course, it will not mean that all local authorities anxious to get ahead with perhaps very much needed schemes for redevelopment will now be able to do so. We must be realistic here. I would remind your Lordships that in any redevelopment scheme loan charges—and particularly the interest element—can represent a substantial charge on the rates during the initial period before rents begin to come in or before money is received from the sale of sites for redevelopment.

However, the noble Viscount, Lord Colville of Culross, has said this particular clause is not a panacea, and of course it is not. The suspension of loan charges in itself can be expensive, and borrowing to pay interest during the period of suspension will naturally in certain cases quite substantially increase the total cost. Therefore, borrowing for interest, as this clause will permit, is something which the local authorities will not wish lightly to undertake. Nevertheless, I have no doubt that many redevelopment schemes can be expected to yield revenue on a scale which will amply justify recourse to this particular clause; and the experience of private developers proves this up to the hilt. I can think of a number of otherwise very desirable schemes which would have been held up even in the last year or so but which might well have gone forward to the advantage of the community concerned had this provision existed. I do not think I should name the place, but there was a case in the North-East where the importance of power to defer interest charges would have meant the imposition of an additional 3s. rate for the first years of the scheme. In the future that sort of scheme could be proceeded with, if the circumstances were right, without laying an undue burden on the ratepayers. In any event, I am confident that this power to borrow to pay interest will in fact be widely welcomed, as it has already been, by many go-ahead local authorities.

Before I leave this clause I should perhaps confirm to my noble friend that, in framing regulations or in designating purposes in individual cases where this power to suspend would be authorised, my right honourable friend would restrict the operation of the clause to purposes which would either produce revenue or lead to the receipt of a capital sum for the sale of land or property. If there is no prospect of either of these things, the local authorities ought, of course, to meet the loan charges in full from the outset.

My Lords, I do not think there is anything further I need add to what my noble friend has said in his lucid explanation of this complicated measure. In looking down the clauses I noticed that, under Clause 14, the Isles of Scilly can be brought within the scope of the Bill. This is doubtless a most important provision, but it surprised me at the time. Nevertheless, I gather from your Lordships that this Scilly provision (if your Lordships will excuse that appalling pun, which I think is permissible on a Friday) is quite customary in local government measures of this sort. That said, I should like once again to echo the congratulations which my noble friend has already received on being the sponsor of what I regard as a thoroughly useful addition to legislation, which I am sure will work to the advantage of Government, both central and local.

VISCOUNT COLVILLE OF CULROSS

My Lords, I am most grateful to your Lordships for the welcome which you have given to this Bill. On the last point that my noble friend made, I must say that I should think the Council of the Isles of Scilly would be just as jealous as myself that they should on all possible occasions have a special mention in legislation of this nature. I think it is entirely suitable. Apart from thanking my noble friends and the noble Lord, Lord Champion, opposite, for their enthusiastic welcome to this Bill, the only other thing that I should like to say is that in opening I forgot to draw attention to the most important part which will be played in safeguards under the Bill by the district and the professional auditor. This is a subject close to my heart, and I am glad to see that he has an important part to play, whether he be district or professional. My Lords, I commend the Bill to your Lordships for a second reading.

On Question, Bill read 2a, and committed to a Committee of the Whole House.

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