HL Deb 28 July 1977 vol 386 cc1176-81

1 After Clause 1, insert the following new clause:

Provisions concerning exercise of powers.

The parties to an agreement or intended agreement whereby any building or work (in this Act called a "relevant work") is to be constructed by a district council (in this Act called a "contracting council") under an agreement made by virtue of section 1 above shall comply with sections (Obligation to put work out to tender) (Form of Contract) and (Separate accounting) of this Act.

2 Insert the following new clause:

Obligation to put work out to tender.

—(1) A local authority which desires a contracting council to carry out a relevant work shall either—

  1. (a) put the relevant work out for competitive tender and in respect thereof comply with the provisions of the Code of Procedure for Selective Tendering (1972 Edition) published by the National Joint Consultative Committee of Architects, Quantity Surveyors and Builders or such other code of procedure as shall from time to time be published by that committee in collaboration with the Secretary of State; or, if the Secretary of State so directs, shall comply with such other 1177 code as may be prescribed or approved by him for the purposes of this section; or
  2. (b) negotiate a price which shall not exceed the limit specified in subsection (2) below.

(2) The limit specified for the purposes of subsection (1) above shall be £50,000 or a higher sum being the same proportion to the said sum of £50,000 as shall be borne by any increase in the Index of Retail Prices to the figure shown therein for the month of July 1977.

(3) The Index of Retail Prices means the Index of Retail Prices published by H.M. Stationery Office or any official publication substituted therefor.

3 Insert the following new clause:

Suspension of powers.

The Secretary of State shall have power by written notice to suspend for such period or periods as he thinks fit the operation by a district council therein named of the powers conferred by section 1 above if after consideration of the specified accounts prepared by that Council in accordance with section (Separate accounting) of this Act or the reports of the District Auditor on the new building and construction works carried out by that council on its own behalf he is of the opinion that there is an unreasonable risk that the exercise of those powers will result in loss to the council.

4 Insert the following new clause:

Form of contract.

Any agreement for the carrying out of a relevant work shall incorporate the appropriate standard form of building contract for the time being published by the Joint Contracts Tribunal (commonly called the RIBA Standard Form of Contract) or that published by the Association of Consulting Engineers, the Institution of Civil Engineers and the Federation of Civil Engineering Contractors (commonly called the ICE Standard Form of Contract) or such other standard form as shall be in common use.

5 Insert the following new clause:

Separate accounting

  1. —(1) The accounts of the contracting council shall include a separate account (hereinafter called "the specified account ") in respect of each relevant work carried out by that council under an agreement made by virtue of section 1 of this Act and which shall be included in the accounts next following the expiry of nine months after the issue of the final certificate for that work; and subsection (1) of section 159 of the Local Government Act 1972 (which relates to the inspection and taking of copies of accounts) shall have effect as if the reference to the accounts to be audited included a reference to the specified account.
  2. (2) The contracting council shall bring into the specified account all costs, liabilities, charges and expenses including financing costs attributable to the relevant 1178 work to which the account relates and shall in particular without prejudice to the generality of the foregoing ensure that the specified account shall—
    1. (a) include a proper charge in respect of—
      1. (i) labour and labour overheads;
      2. (ii) the use of premises in connection with the carrying out of the relevant work;
      3. (iii) building and works department administrative and supervisory expenses;
      4. (iv) central administrative expenses;
      5. (v) capital, operating, maintenance and finance costs for all plant equipment, vehicles and workshops, used in carrying out the relevant work;
      6. (vi) any supplies taken from stock for the purpose of carrying out the relevant work; and
      7. (vii) in relation to goods manufactured by the contracting council and used in the carrying out of the relevant work, labour materials and all other relevant expenses; and
    2. (b) where an item is attributable partly to the relevant work and partly to other work or to two or more relevant works show a fair apportionment having regard to the respective values of the works in question.
  3. (3) After audit the specified account shall be available to the public for examination.
  4. (4) The contracting council shall use their best endeavours to secure that (having due regard to the provisions of subsection (2) above) the income derived from the carrying out of each relevant work is sufficient to defray their expenditure in respect of that work."

6 In the title, line 1, leave out from beginning to end of line 4 and insert "restore certain powers conferred on certain district councils by certain orders made by virtue of section 254 of the Local Government Act 1972; to impose certain financial duties; and for connected purposes."

The Commons disagreed to the above Amendments for the following Reason:

7 Because they do not represent a code of general application but impose obligations in respect of only a small part of the work carried out by a limited number of authorities.

Baroness BIRK

My Lords, I beg to move that this House doth not insist on their Amendments Nos. 1 to 6 to which the Commons have disagreed for the Reason numbered 7.

Moved, That this House doth not insist on their Amendments Nos. 1 to 6 to which the Commons have disagreed for the Reason numbered 7.—(Baroness Birk.)

Lord SANDYS

My Lords, we regret very much that another place thought fit to attach to our series of Amendments the Reason stated on the Marshalled List. These Amendments have come to be known as the CIPFA Amendments, taking the initials of the Chartered Institute of Public Finance and Accountancy, and they were the subject of a tied vote in Standing Committee in another place, when the Chairman of that Committee cast his vote. Unfortunately, history in your Lordships' House and in another place has shown a remarkable degree of dissimilarity over what the Liberal Party have thought on this subject.

These Amendments were written into the Bill by your Lordships' House, with the support of the Liberal Party. The Bill returned to another place, where no fewer than 12 out of 13 Members of the Liberal Party promptly voted against them. I do not understand the reason for the change of heart that took place, but I believe that these Amendments were particularly significant and important. One of the most significant reasons which we chose to attach to them was that the CIPFA Amendments were, in another form, involved in two existing Acts of Parliament: that is, the South Glamorgan Act and the Tyne and Wear Act. Taken together, the Amendments would contain a sensible group of provisions which any reasonable authority would adopt and put into practice.

I did not know, and still do not know, why the Government throughout in another place chose to adopt the attitude which they did. Again and again, the noble Baroness's right honourable friend Mr. Freeson said: "If only the original Bill had been introduced, we could then have adopted these Amendments". Mr. Freeson said that not only on all stages in the Commons, but when the Bill returned to another place quite recently. I will not weary your Lordships with a further history, but it is quite apparent that these very important Amendments could, and indeed should, have been written into the Bill. But the opportunity has passed us by, and we must bow to what another place has chosen to do.

Lord WIGODER

My Lords, may I startle the noble Lord, Lord Sandys, by indicating to him that there are some people who are prepared to approach a problem with an open mind, and to listen to the arguments and vote on the merits. What, in fact, happened—and I want merely to put the record straight—was that when the Amendments were considered in your Lordships' House, my colleagues on the Liberal Benches here, with the full support and co-operation of our colleagues in the other place, decided to support the Conservative Amendments, and that we did. After that had happened, discussions took place between the Government and the Liberal Party which as all of your Lordships know, are now invariably harmonious and successful. In the result, when the Minister spoke yesterday he gave a series of undertakings and assurances which were far in advance of anything that had been issued up to that moment. In the light of that wholly changed position, and again with the full support of the entire Liberal Party both in the other place and in this House, it was decided that it was perfectly proper to allow these Amendments to be defeated and to support the Government's line.

Baroness BIRK

My Lords, I think that the noble Lord, Lord Wigoder, has explained the Liberal situation to his satisfaction, but I doubt whether it is to the satisfaction of the noble Lord, Lord Sandys. But I do not intend to intervene on that point. Your Lordships will recall that in Committee and at Report stage on this Bill I said that, while the Government accepted readily that there was a need for a comprehensive modern statutory framework for the operation of local authority DLOs, they could not agree that this Bill was an appropriate vehicle for tinkering with the present requirements.

Our overriding reason for this was and still is—I say this in view in particular of the comments of the noble Lord, Lord Sandys—that the Bill deals with powers which give rise to only a very small part of the total DLO work of a very small proportion of the total number of local authorities. The additional provisions contained in the Amendments made to the Bill in this House can apply only to that very tiny fraction of local authority DLO work. They will not apply at all to most local authorities and only to work done under the provisions of the Bill in the 25 local authorities to which it does apply.

My right honourable friend the Minister for Housing and Construction, speaking in another place last night, specifically undertook that when he has received and considered the reports of his departmental Working Party and of CIPFA, who are both studying the subject, he will publish as soon as he can a consultation document fully setting out the Government's views on what should be done and on the new legislation which would be necessary. He will also issue further advice by circular to local authorities stressing the need within the existing Statutes for careful and accurate accounting, for fair procedures and for clear comparison with the private sector.

It now seems that the need for the greater part of our proposals is accepted by all parties. Therefore, we look forward to a more constructive approach when the Government's conclusions are known. Meanwhile, in view of the decisions taken in another place and bearing in mind the undertakings that were given and to which the noble Lord, Lord Wigoder, referred, I submit that this House should not insist upon the Amendments covering Clauses 2 to 6 of the Bill.

On Question, Motion agreed to.