HL Deb 06 February 1985 vol 459 cc1095-101

5.2 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Avon)

My Lords, with the leave and indulgence of the House, I shall now repeat a Statement being made by my right honourable friend the Secretary of State for the Environment in the other place on setting up an inquiry into local government practices and procedures.

The Statement is as follows:

"In the Debate on the Address on 7th November, I said I intended to set up an inquiry into various practices and procedures in local government. Following discussions with the Opposition parties and the local authority associations, I am now in a position to give further information to the House.

"The terms of reference for the Inquiry will be as follows:

To inquire into practices and procedures governing the conduct of local authority business in Great Britain, with particular reference to:

the rights and responsibilities of elected members;

the respective roles of elected members and officers; and

the need to clarify the limits and conditions governing discretionary spending by local authorities,

and to make any necessary recommendations for strengthening the democratic process.

"Within those terms of reference, I am inviting the Committee to pay particular attention to the following issues:

  1. —ensuring proper accountability for decision-taking to elected members and to the electorate generally; and examining possible ways of strengthening local democrary within the existing structure of local government;
  2. —clarifying the status and role of party groups in decision-taking;
  3. —ensuring the proper participation and accountability of individual elected members in the decision-taking process;
  4. —examining any problems of propriety which may arise from members' conflicts of interest, particularly where officers of one council serve as councillors of another;
  5. —considering the merits of the development of full-time councillors; and the related issues of the use of members' allowances and the remuneration of councillors generally;
  6. —reviewing the system of co-option of nonelected members;
  7. —studying officers' relationships, particularly in view of their legal and professional obligations, with elected members and political groups;
  8. —clarifying the limits and conditions governing discretionary spending, including the use of Sections 137 and 142 of the Local Government Act 1972 (and Sections 83 and 88 of the Local Government (Scotland) Act 1973), for political purposes in local government, or in relation to bodies set up, and largely financed, by local authorities.
"Local government franchise, finance and structure will be outside the terms of reference.

"In view of the growing public concern about the use made by some local authorities of their discretionary powers to engage in overt political campaigning at public expense, I am asking the committee to submit an early interim report on this question. As far as the report as a whole is concerned, I am asking the committee to aim to report within a year.

"It is essential that the inquiry should be both impartial and effective in dealing with these difficult issues. The best way to achieve this is to establish a small committee of people of judgment and ability, headed by a chairman of known integrity. The Secretaries of State for Scotland and Wales and I therefore propose to appoint a committee of four or five members chosen for the personal contribution which each can make to the wide-ranging subject matter of the inquiry. I am glad to inform the House that Mr. David Widdicombe, QC, has indicated to me that he would be prepared to accept appointment as Chairman of the Committee of Inquiry. Further appointments to the committee, of which I shall advise the House, will be made shortly".

My Lords, that concludes the Statement.

Baroness Birk

My Lords, may I first thank the Minister for repeating the Statement made in another place and say that we on this side of the House feel that it is an important Statement and also a timely one? There has not been a full inquiry into local government, or even a semi-inquiry, since Redcliffe-Maud. Councillors and officers have an increasing burden to bear today which gets more difficult all the time.

The terms of reference are wide-ranging and generally constructive. But there are one or two points on which I should like to comment and questions I should like to ask. Among the terms of reference is: the need to clarify the limits and conditions governing discretionary spending by local authorities". I hope the Minister can assure me that this will not exclude the inquiry from recommending the widening of powers in some areas if that is felt desirable. When discretionary powers under Sections 137 and 142 of the Local Government Act have been challenged up to now, the courts have always decided in favour of councils. I hope that that will be kept in mind by the committee of inquiry.

When we come to the issues, one of the issues particularly pointed out by the Minister's right honourable friend is: examining any problems of propriety which may arise from members' conflicts of interest, particularly where officers of one council serve as councillors of another". I hope it will be generally recognised that this is a practice which has been going on for a considerable time and is nothing new. Indeed councillors could have conflicts of interest because of the work they do in their own professions. They could be estate agents, builders, farmers—a whole range of people. It is not the case that conflicts could arise only within the council.

It is a great pity that finance has been ruled out, because this is one of the most critical areas—the critical area—of local government. Many of the problems that this Statement sets out to deal with stem from the way local government is financed. We on this side, together with the Alliance, tried unsuccessfully to persuade the Government to agree to an inquiry into finance in local government when the rate-capping Act was going through and also during proceedings on the paving Act.

We are also concerned that the Committee has to concentrate on the issue of political campaigning at public expense so that it can submit an interim report on this. If the committee is to report on the whole inquiry within a year I fear that the political campaigning—an issue which is tied up with a very much wider problem—will have taken up too much of its time. It is rather a pity, although I know the reason, that it was pulled out in this way rather than being dealt with in the general terms of reference with other issues. If this is so, surely consideration should be given to allowing the committee to take another six months if its needs it, so that it can do a proper job. I am in favour of not allowing committees of inquiry to go on endlessly; but, at the same time, a committee of this sort must be able to do a thorough job and, if it needs another few months, that should be allowed.

The importance of this inquiry to local government—if it is to be, as stated, impartial and effective and, I hope, unbiased—could be very great. If its recommendations are generally accepted and welcomed by local authorities all over England, Scotland and Wales—as it is essential it should be—there could be an improvement in relations between local and central government for which there is a tremendous need today. Relations between central and local government are extremely bad. The problems with local government and central government have created an unfortunate climate of conflict and abrasiveness. If this inquiry is carried on along these lines and can also carry all parties with it, then the contribution to local government could be very valuable. The way in which the committee of inquiry goes about its job and the time and the flexibility that it is allowed are very important.

5.10 p.m.

Baroness Stedman

My Lords, from these Benches we would broadly welcome the setting up of the inquiry, and I hope that all local authorities and their associations will play a proper part in it and will give their full co-operation. Like the noble Baroness, my only regret is that the request made so often from the Benches on this side of the House for a proper inquiry into the function, structure and finance of local government was not quite so readily accepted as this present one.

On the rights and responsibilities of elected members and the need for their proper participation and accountability as individual elected members in the decision-making, will this inquiry be able to cover the rights of all members, irrespective of party, to have representation on committees and to have access to all the committee documents with no opportunities for any majority party to lock them out of information and access that is necessary to enable them to do the job for which they were elected? Will the committee be looking, for example, at matters like the Hackney Council case as a possible precedent on which to work?

I believe that it is essential that we have a proper definition of the rights and duties of elected members to make policy and of the responsibility of the officers to ensure that those decisions are fully implemented. It is very important that local authority officers do not become the pawns of any majority party, because their political neutrality over the years has been one of the very great strengths of local government. Will the committee be asked to take a view on the need for political advisers, as such, in local government and how they should be paid? Will it also look at allegations that we have seen from time to time about blatantly political appointments being made in the officer structure?

I am glad that the committee is going to look at discretionary spending. Some of us have felt that some of the grants that have been made have been, to say the least, questionable; and we on these Benches have shown our concern over what we have considered to be gross abuses of power in some authorities. Will the inquiry be expected to come out with clear, unequivocal guidelines and proposals, perhaps, for limiting the range of discretionary spending?

On the question of co-option, I think we would remain open to persuasion if the committee makes a good case for it. We may not be averse to limited co-option of non-members for their specific expertise and for a limited time; but we should not want to see any means of co-option being used or abused to alter or strengthen the political control of elected councils.

My Lords, will evidence be invited from other people and other bodies and be taken by this committee of inquiry? The noble Lord has said that the report as a whole is to be completed in one year and that the question of discretionary spending is to be the subject of an interim report. Is that the only matter to be included in the interim report? Or are other items in this inquiry expected to be covered? And when may we expect to have the interim report if the full report is expected within one year? Has the Minister any idea at this time when the Government would be likely to be introducing any necessary legislation following receipt of the full report?

The Earl of Avon

My Lords, I am grateful to both noble Baronesses for their support and particularly to the noble Baroness, Lady Birk, for saying that the inquiry was both an important and timely contribution. To answer some of their specific questions, the noble Baroness, Lady Birk, asked about paragraph (c) which covers: the need to clarify the limits and conditions governing discretionary spending by local authorities". I think that my best answer to that is to say that I will certainly bring the inquiry's attention to her remarks so that they can have a look at that particular point. While there is nothing new, perhaps in the conflict of interest between an officer serving as a councillor on another council, I am sure that the noble Baroness will agree that this has increased of late, which has put a slightly different emphasis on it.

Both noble Baronesses asked about the financial side of the matter and whether this could not be included. While questions of accountability and the respective roles of members and officers in financial matters will fall well within the scope of the inquiry, it is essential to maintain a clear distinction between the committee's primary concern with the practices and procedures of local government and the local government finance studies which are now being undertaken within the department. While I have no doubt that the committee will wish to keep in touch with the progress of these studies in so far as they are relevant to the subject matter of the inquiry, the manner in which this is done must be a matter for the committee itself.

Both noble Baronesses drew attention to the paragraph about the interim report. I would say to the noble Baroness, Lady Birk, that I am sure that the committee, if they can produce a report in a shorter time than one year will do so and, similarly, I am sure that, if they find that they cannot do it within a year, they will come and say that they need another month or two. But the year is a guideline which I believe is about the right time. In this interim report the discretionary powers to engage in overt political campaigning at public expense is the sentence from the Statement which shows what the committee has been asked to look into.

The noble Baroness Lady Stedman asked a series of questions. Certainly on the first one, about rights, the answer is, yes. To the political adverser allegations, the answer is, yes; to clear guidelines, yes. All this I think would be a, "yes". but I do not want to lead the committee into giving attention to things when it may not want to do so. I believe that we all in this House look foward to an impartial and effective inquiry which will he a real benefit to local government.

Baroness Stedman

My Lords, before the noble Earl sits down, may I ask him whether this committee of inquiry will receive evidence from other bodies?

The Earl of Avon

I think that the answer is to that is that it certainly may, rather than will.

Lord Sandford

My Lords, I thank my noble friend for this Statement. Would he agree that this is the inquiry which is already known as the "abuses inquiry" and will continue to be known as that because it is the abuses that now prevail alas! in a very small number of authorities which have brought this about? Would he agree that this is, indeed, a tragic situation? Would he also agree that, as the noble Baroness opposite said, important as this inquiry is, the radical inquiry into local government finance which his right honourable friend has at last set on foot is even more important and that we shall want to hear about that before very long?

The Earl of Avon

My Lords, I am grateful to my noble friend for his welcome and also for his support in agreeing that the inquiry is necessary. I agree with him that unfortunately a small number of abuses in a small number of places have led to this rather sizeable inquiry. So far as local government finance is concerned, I can confirm that the studies on this are progressing. In fact, I attended a seminar on it only last weekend.

Baroness Birk

My Lords, on that point, I wonder whether I may say that the Minister would of course acknowledge that there is a difference between the internal inquiry into finance which is going on at the moment and the broader and external inquiry into finance in local government to which I think the noble Baroness, Lady Stedman and I were referring.

The Earl of Avon

My Lords, when I replied to the noble Baroness I very carefully read out the actual wording here so that I should not get it wrong. I hope that she will read Hansard and be happy with it.

Lord Tordoff

My Lords, I thoroughly support everything that my noble friend has said from the Alliance Benches. There is one specific area with which I should like the Minister to deal, if he can. That is the question of the local government ombudsman. The noble Lord sitting behind quite rightly said that there were a small number of authorities who abused their powers. One of them was referred to in your Lordships' House some time ago: that is Beverley. The case of Beverley Minster was debated some time ago on a Motion introduced by the noble and learned Lord, Lord Simon of Glaisdale, as your Lordships will recall. In that case, the findings of the ombudsman had been ignored on two occasions by that council. Can we have an assurance that this inquiry will look into the role of the Local Government Ombudsman, with the possibility of perhaps giving him rather more teeth to act in those cases where his findings have been totally ignored?

The Earl of Avon

My Lords, I certainly would not preclude the possibility that the inquiry might wish to consider the role of the ombudsman in the checking of abuses, but I think we should leave that actually to the committee to decide.

Lord Grimond

My Lords, may I ask the Minister one question concerning Scotland? May I, first of all, say how much I agree with what has been said about the lack of any inquiry into the finance of local authorities. In the absence of that, I feel that this inquiry will be largely frustrated. May I ask the Minister whether it will be within the powers of the inquiry to inquire into the number of tiers of local government in Scotland? As he will be aware, there has been considerable criticism of the two-tier system in Scotland, not least from his own party. Do I take it therefore that it will be outwith the remit of the inquiry? If not, are they entitled to inquire into it and also into the relationship of the various local authorities in Scotland?

The noble Earl will also be aware that there has recently been a report by the Montgomery Committee regarding the powers of the local authorities and the islands councils. Presumably—may I have this confirmed?—the islands councils will be entitled to make representations to the inquiry on any matters which fall within its remit.

The Earl of Avon

My Lords, it specifically says in the Statement that the structure will be outside the terms of reference.

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