HL Deb 02 December 1991 vol 533 cc78-90

House again in Committee on Clause 5.

[Amendment No. 31 not moved.]

Baroness Hollis of Heigham moved Amendment No. 32:

Page 6, line 7, after ("above") insert: ("(aa) to any magistrates' court committee).

The noble Baroness said: I shall speak also to Amendment No. 33. Amendment No. 32 is modest and straightforward. There should be no difficulty in taking it on board. The Bill provides that auditor's reports be scrutinised by the council of the local authority. That is entirely right and correct. However, the issues which the auditor's report raises may, first, touch on the administration or personnel and financing of magistrates' courts, 25 per cent. of the costs of which come from local authorities. Secondly, they may touch equally on the competence and capacity of individual schools and FE colleges to handle their cash budgets under LMS. However, the Bill contains no provision for the magistrates' courts committees or the governors of local schools and FE colleges to consider an auditor's report which may directly affect them. Would it not be sensible that they too should receive and respond to the reports, especially if the reports are critical of their performance? We suggest that the discipline of receiving and discussing the auditor's reports should apply to all bodies under his purview. I beg to move.

Baroness Blatch

There is a good point underlying Amendment No. 32. Under the present law the Audit Commission has no right of access to the accounts of magistrates' courts committees, although its auditors as part of their routine work audit the accounts of local authorities, which in accordance with the Justices of the Peace Act 1979 are responsible for paying magistrates' courts committees' expenses. The position of magistrates' courts committees is therefore different from that of probation committees, which are within the value for money scrutiny of the Audit Commission and its auditors. It is not easy to see the reasons for this difference or why the magistrates' courts service should not have the full benefits of Audit Commission review and advice.

The difficulty with this amendment is that it would go too far in the other direction. It would equate magistrates' courts committees with local authorities even though probation committees are outside the scope of Clauses 5 and 6 of the Bill. The two committees have specialised management responsibilities and are not elected by the general public. As regards the independent and non-political administration of justice, there are good reasons why the normal requirements of accountability to local government electors, and hence the provision of Clauses 5 and 6, should not apply in that case.

There remains the question of whether the Audit Commission should have a greater role in relation to the magistrates' courts service than it now has. Members of the Committee will be aware that the Government have had under consideration for some time the recommendations of a scrutiny of the service to the effect that it should be reconstituted on a national basis as an executive agency of the Home Office. There have been extensive consultations on the scrutiny report with interested bodies and the Government hope to announce their conclusions shortly. The involvement of the Audit Commission is of course bound up with the outcome, which I cannot anticipate today. I should, however, like to take careful note of the points made by the noble Baroness and to draw them to the attention of my right honourable friend the Home Secretary with a view to considering the possibility of a government amendment at a later stage in relation to the remit of the Audit Commission in this area.

As regards Amendment No. 33, auditors' reports on local authorities may already cover schools and colleges. However, I think I understand what Members of the Committee opposite have in mind—that the local education authority will not be in a position to answer at open meetings for spending decisions taken in schools and colleges, because the discretion over that spending has been delegated to the governing bodies of those institutions.

But when it comes to matters of audit the duties of local authority chief finance officers are unchanged by local management. Schemes of local management specifically allow the chief finance officer access to any information in those institutions which is needed for audit purposes; and ultimately, if institutions fail to spend the money put at their discretion satisfactorily, the local education authority may withdraw delegation under the Education Reform Act. Consequently it is right to make the local authority answerable in open meetings for the probity of public funds spent in these institutions, just as elsewhere within the authority. The right way of so doing is through the mechanism set out in this Bill.

Perhaps I should say a few words about value for money rather than audit. Members of the Committee may be wondering how the local authority can properly comment on the value for money and the quality of service delivered in schools and colleges when the discretion over the spending decisions rests with the governors. The solution is that governors should be answerable for this—and that is just what we have already done. Under the Education (No.2) Act 1986, governors have to publish annual reports on their schools which, among other items, give details of how the schools' money is spent. The governors must then hold a public meeting for parents at which the report can be discussed. Before long, Members of the Committee will have the opportunity to debate a Bill, currently in another place, which reforms the arrangements for school inspections. School governors will have to publish inspection reports and will be held to account by parents and the local community for the quality of education which has been delivered in their school.

As regards colleges of further education, Members of the Committee will know that another Bill which is currently before this House takes these colleges out of the local authority sector and establishes them as independent institutions, funded by further education funding councils. The Further and Higher Education Bill provides for the quality of education provided in the colleges to be assessed and for the establishment of a quality assessment committee. We should leave the discussion on those detailed arrangements for the Committee stage on that Bill, which will begin shortly. I have no doubt that this Chamber will address them with its usual vigour. I hope that on that basis the noble Baroness will withdraw the amendment.

Baroness Hollis of Heigham

I thank the Minister for that helpful reply, in particular her response to the point about magistrates' courts. I hope that after consulting the legal draftsmen we can both return to the matter at a later stage. I take her point that perhaps a more appropriate way to deal with the LMS and FE colleges is in other education Bills. It is pleasant to acknowledge even so late in the day that we share the common perspective of making public moneys publicly accountable through the auditing procedure. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment Nos. 33 and 34 not moved.]

Clause 5 agreed to.

Clause 6 agreed to.

Clause 7 [Publication of information by the Audit Commission]:

[Amendment Nos. 35 and 36 not moved.]

Clause 7 agreed to.

Clause 8 [Application of competitive tendering to professional services etc.]:

Lord McIntosh of Haringey moved Amendment No. 37:

Page 8, line 12, leave out from ("make") to second ("for") in line 24 and insert ("provision applicable on a common basis to any defined activity within the meaning of Part I of the 1988 Act").

The noble Lord said: With this amendment we come to the second part of Part I—Clauses 8 to 11, which are concerned with compulsory competitive tendering. I shall not repeat the arguments which we had on Second Reading and when we considered the instruction to the Committee about the propriety of including those clauses at all.

In speaking to this amendment I wish to concentrate on one aspect to which I referred in the debate on the Queen's Speech but which has not received much attention since; that is, the provision at the beginning of Clause 8 that: The Secretary of State may by order make such modifications of Part I of the 1988 Act … as he thinks fit", for various purposes.

It seems to me that that is a classic example of an issue which has recently concerned Members of this Chamber; that is, what is called the Henry VIII provision. I am not sure why it is called that. Perhaps the noble and learned Lord, Lord Simon, will complete my extremely inadequate legal education on this matter. However, for me its impact is the power given to a Secretary of State by order, by secondary legislation, to amend primary legislation. Every time that that has been attempted, there has been forceful protest in this Chamber. There have been occasions when such a protest has resulted in action.

Clause 8(1) gives power by order to amend Part I of the Local Government Act as the Secretary of State thinks fit for the purpose of adding professional advice or services or other services to the list subject to compulsory competitive tendering under that Act. We cannot know, because it is left to secondary legislation, what services will be added even after the current consultation period which ends on 31st January 1992. In addition to the complaints which we have already made about the unsatisfactory nature of those four clauses and the fact that the consultation is simultaneous with, and will outlive, the consideration of the Bill in this Chamber, there is the additional objection that this clause gives the Secretary of State power by order to amend primary legislation.

We shall not be impressed by arguments that the powers given are relatively restricted. That is not the point. The point is that primary legislation should not be amended except by primary legislation. There should be no provision to make that possible.

Our amendment takes out from "make" in line 12 to the second "for" in line 24; that is, it takes out the part up to the introduction to Clause 8(2). In case there is any confusion about this, I should say that a later amendment, Amendment No. 83, purports to take out a section from the first "for" in line 24. That is a misprint. It is intended that it should be butted on to Amendment No. 37 and not to the first "for" in line 24. I believe that we tabled the amendment without realising to which "for" it was intended to apply. I apologise for that but when we reach Amendment No. 83 we shall see that it makes sense only if applied to the second "for" and not to the first "for".

The amendment takes out a part of Clause 8(1) and a part of Clause 8(2). However, it does not take out the whole purpose of Clause 8. It removes the parts which are most offensive to Parliament. It remodels the clause giving the effect that the Secretary of State still has powers by order to make provision but he can make common provision applicable to any existing service under the 1988 Act for the purpose of evaluating quality and financial terms.

I hope that that explanation is sufficiently clear to enable Members of the Committee to realise that this amendment addresses an extremely important issue in legislation. It is not a wrecking amendment. It leaves powers in the Bill which are consistent with existing legislation. If the Government are not satisfied with what is done in this amendment, they can bring back such amendments as they think fit at a later stage or in another place. However, it is vital that the Committee should now agree that Henry VIII legislation is not acceptable to this Chamber and must be resisted at all costs. I beg to move.

8.15 p.m.

Baroness Blatch

I must argue not only as regards the generality, because clearly it does not apply in every case, but if secondary legislation were not to be accepted in this Chamber, we should not be able to cope with the minutiae which would appear on the face of Bills. I believe that that is what the noble Lord said.

Lord McIntosh of Haringey

I never suggested that there should be no secondary legislation. No party which intends to take part in government could ever say that. I said that secondary legislation should not be allowed to amend primary legislation at the discretion of the Secretary of State.

Baroness Blatch

I assume that the intended effect of the amendment is to enable the Secretary of State to provide by order that CCT for the work already subject to CCT under the Local Government Act 1988 should involve a two-stage tendering procedure in which the quality of tenders should be evaluated first and the evaluation of costs should take place subsequently.

It is important that quality should be safeguarded in the provision of services such as refuse collection and street cleaning which are already subject to CCT under the 1988 Act. There are many in local government who will readily agree that the identification and improvement of the quality of service provision has been one of the most significant results of CCT, because of the need for local authorities to prepare detailed specifications of the work involved as a basis for the tendering exercise. Research carried out for us by the Institute of Local Government Studies at Birmingham has shown that even as cost savings have come through from CCT so the standards of service have generally been upheld and, in some cases, raised. In the light of that experience, we see no need to import separate evaluation of quality and cost into the tendering procedures for the work already subject to CCT.

The quality of all services, whether manual or professional, is important. However, we recognise that the nature of the work carried out by professional employees is different from the manual services, not least because of the intellectual content of professional services. We have not said that we shall definitely specify a two-stage tendering procedure for all professional services subject to CCT. In our consultation paper we have said that we are prepared to consider modifying the existing CCT requirements in this way, but we intend to listen carefully to the points made by respondents to our paper before making up our minds.

As Members of the Committee have been reminded a number of times, both Houses will have an opportunity to decide whether or not they like the regulations when they are brought before Parliament. I ask the noble Lord to withdraw his amendment.

Lord Simon of Glaisdale

The noble Lord, Lord McIntosh, has clearly identified, having spotted it on Second Reading, a constitutional objection to the clause. With all respect, the noble Baroness has not met the point he made at all. As the noble Lord said, this is a Henry VIII provision. It is so called because it is a power similar to that given to Henry VIII by the Statute of Proclamations to amend by ministerial decree an Act of Parliament. That is what this provision does. That became a matter of contention between Parliament and the Executive for 150 years.

The right of Parliament to legislate was, in a famous phrase, the cause for which Hampden died in the field and Sidney on the scaffold. It was by their efforts and the efforts of others that the matter was resolved in favour of Parliament in 1688 and 1689.

For the best part of two centuries there was no further attempt by the Executive to usurp the function of Parliament and to govern by decree—ministerial order. It was tried again innocuously at the end of the 19th Century in an Act that will be well known to those noble Lords who are experts on local government. It was the Act which set up the county councils as the administrative governors of the counties in place of the justices sitting at Quarter Sessions. For that to be done there had to be elections to the county council and a date fixed for those elections. However, it was not certain whether the machinery would be ready in time. The Secretary of State, the Minister, was therefore given power to alter the date if it was inconvenient, indeed impossible, to carry through the machinery by the date specified in the Act of Parliament.

That is a good example of the circumstances in which a Henry VIII provision is excusable. It was not merely convenient to the Executive; it was necessary that the Secretary of State should be given that power. Inevitably, since such is the nature of power, to aggrandise power—that is the corrupting element in the exercise of power—what was used innocuously was afterwards used in a way that was open to objection.

Up till around 1930 and increasingly, the Henry VIII provision was inserted into Acts of Parliament to mounting alarm, so much so that at the beginning of the 1930s an extremely powerful committee—the Donoughmore Committee—was set up to review the whole question of delegated legislation. What it said in regard to the Henry VIII provision—calling it by that name—was that it was a serious inroad on parliamentary prerogatives: that it should be used only when it was not merely convenient but necessary. That was accepted. Until quite recently, from 1932 onwards, except for one isolated example at the beginning of the 1970s, there was no attempt to resuscitate this unconstitutional power.

Around five Sessions ago, simultaneously in one Session, in three Bills there were attempts to revive this ministerial power by decree; to amend, to terminate and to add to an Act of Parliament. It came under specific attention in the Children Act. It did so partly because a constitutional lawyer, the late Lord Elwyn-Jones, was leading in criticism of that measure and partly because my noble and learned friend the Lord Chancellor was in charge of it. My noble and learned friend was asked specifically on that occasion, and again in the following year in the passage of the Courts and Legal Services Bill, whether the Government accepted the recommendation of the Donoughmore Committee. He said that in general they did. He said that on more than one occasion.

The alarming point is that in the next Session his assurance was disregarded, and disregarded in a startling way. It occurred during the passage of the Statutory Sick Pay Bill. The Executive sought to take power to amend an Act of Parliament in such a way that it altered a fiscal charge on the individual citizen and thereby a charge on public funds. What is more, it made such decree only subject to the negative resolution procedure. That was objected to in the other place and the Government then undertook that it should be the affirmative resolution procedure. However, that was not good enough for your Lordships, quite rightly, as the watchdogs of the constitution. Your Lordships insisted, in a Division against the Government, in expunging that Henry VIII provision from the Statutory Sick Pay Bill. That was accepted and everybody hoped that it would be the end of that particular business.

However, it has again been sought recently to re-infiltrate those provisions. The noble Lord, Lord McIntosh, rightly said that it is narrowly defined in the Bill. That merely means that it can be easily amended—made the subject of amendment by primary legislation. There is no call for a Henry VIII provision at all. The noble Baroness, who has done so valiantly on the Bill, fortunately has an easy task in answering the points made on the provision; that is, to say that the provision is not merely convenient—of course it is convenient for the Executive—but that it is necessary, and why it is necessary.

I have no hesitation in supporting the noble Lord, Lord McIntosh. It seems to me to be a shameful thing that this matter should be debated late at night in an empty Chamber. That denies your Lordships your position as watchdogs of the constitution and detailed scrutineers of the Bills presented to Parliament. I therefore have no hesitation in supporting the amendment.

Baroness Blatch

It is with some trepidation that I rise to take issue with both the noble Lord, Lord McIntosh, and indeed the noble and learned Lord, Lord Simon of Glaisdale. The noble and learned Lord said that he saw no need for the provision and invited me to give good reason for the use of this specific power.

First, I do not accept that it is a Henry VIII provision. The provision cannot allow the Secretary of State to govern by decree, as the noble and learned Lord claims. Any order made under Clause 8 will be subject to the affirmative resolution procedure of both Houses. Furthermore, we set out clearly the outlines of how we propose to use the power in the consultation document.

It is known that the Secretary of State has the power vested in him by the 1988 Act to extend compulsory competitive tendering. However, given the extension to some of the more professional services that we have outlined during the course of today, it is necessary to provide regulations which recognise both the complexity of establishing tendering arrangements for professional services and the sensitivity of those services in such a way that allows more effective implementation of those measures. Without that power the Secretary of State would have the power to extend compulsory competitive tendering but he would be left with no mechanism—

Lord Simon of Glaisdale

Will the noble Baroness say what she means by flexibility in that connection?

Baroness Blatch

If one takes either architectural services, advice or legal advice and so forth, where competitive tendering applies, the Government have made it clear that there would be two considerations: one about the quality threshold for the services and another on cost. The consultation document is still very much in play. It is also possible that perhaps even accounting arrangements may have to be modified in such a way that makes sense of implementing those provisions. I am saying that merely having the power to extend to those areas leaves the Secretary of State with absolutely no flexibility other than the sort of crudity of power that he had to implement a straightforward service which does not require the more sensitive and real recognition of the complexity of some of the more professional services.

All we are asking in this part of the Bill is to acknowledge the Secretary of State's existing power vested in him by the 1988 Act to extend compulsory competitive tendering to other areas. Where those other areas require more complex arrangements for establishing tendering processes which make more sense and more effective implementation possible, then we shall need that flexibility. That is the intended use of it. It is well trailed in the documents and certainly in the consultation documents. There is really nothing more sinister in it than that. I ask for the Committee's understanding for what I believe is a degree of flexibility for sensible implementation of a policy.

8.30 p.m.

Lord McIntosh of Haringey

The Minister has given one reply which I expected. It is that the matter is not really all that important, which confirms the question put by the noble and learned Lord, Lord Simon of Glaisdale. If the matter is not all that important then it is certainly not necessary in the sense that exceptions to the Henry VIII provision should be permitted.

Baroness Blatch

I am grateful to the noble Lord for giving way. I hope that I did not imply that the matter was not important. I understand the import of taking a power which has the effect of modifying primary legislation in this way. I was saying that this degree of flexibility to bring about sensible implementation of this power is necessary. The case was made very eloquently by the noble and learned Lord, Lord Simon of Glaisdale. It was a very dramatic illustration of the worst abuse of that kind of power. I believe that I have set out good reasons for using it. It is only about a minor modification. I am not suggesting that it is not important.

Lord McIntosh of Haringey

I am grateful for that. I yield to the view of the noble and learned Lord, Lord Simon of Glaisdale, about the cases where there could be exceptions to the general prohibition of the Donoughmore Committee as regards Henry VIII legislation. In the Minister's reply I was surprised to hear that she sought to rely on two arguments to condone the use of Henry VIII legislation on this occasion. She said first that it was all right because there is an affirmative resolution in subsection (4). It is true that that literally comes back to Parliament. However, as is well known when resolutions come back to Parliament for approval they cannot be amended. It is a well-hallowed tradition in this Chamber with which I totally agree, that we should not actually vote against resolutions as regards this kind of secondary legislation.

The second argument that she used was even more surprising. She said that the Government had set out their position in the consultation paper. It is unfortunate to go back to that argument because it is, after all, only a consultation paper. It does not have even the status of the Government's response to the results of the consultation. As a consultation paper it has no force of any kind with which the Committee can be properly concerned. Therefore, on this single issue with which we are concerned on this occasion is it proper for the Bill to give powers to the Secretary of State to modify, amend, alter, extend or whatever the word may be, primary legislation in the 1988 Act? I believe that we must rely on the mature judgment of the noble and learned Lord. We must say no, that it is not proper and the Committee should agree to Amendment No. 37.

Baroness Hamwee

I have no wish to detain the Committee for more than one sentence. I support the amendment. I am extremely glad that it was the Minister and not I who followed the noble and learned Lord, Lord Simon. I could not possibly have emulated him. He gave me the key to what I want to say which is about the use of the term "flexibility". On a question of such constitutional importance it is a term which should make us all think extremely hard about what we are being asked to do. I support the amendment.

Lord Simon of Glaisdale

Perhaps I may intervene very shortly again. The noble Baroness's answer seems to me to be particularly dangerous. I can conceive of no circumstances where a complex situation cannot be spelt out where the use of the Henry VIII clause is not, on her argument, permissible. That is driving a coach and horses through the Donoughmore Report and my noble and learned friend's acceptance of it. Whatever happens I hope that the Committee will put on record that the justification for this unconstitutional power is not to be accepted for a moment.

Lord McIntosh of Haringey

I do not believe that I can add anything to that. The Committee should take a view on the matter.

The Deputy Chairman of Committees (The Viscount of Oxfuird)

Before the Question is put I draw to the attention of the Committee that, should Amendment No. 37 be agreed to, I shall be unable to call Amendments Nos. 38 to 83 inclusive due to pre-emption.

Lord McIntosh of Haringey

Before the Deputy Chairman of Committees puts the Question I point out that I have indicated that there is an error in Amendment No. 83. I shall put down a manuscript amendment to that effect while the Division is taking place to make sure that Amendment No. 83 is not pre-empted by this amendment.

8.37 p.m.

On Question, Whether the said amendment (No. 37) shall be agreed to?

Their Lordships divided: Contents, 62; Not-Contents, 55.

Division No. 3
Addington, L. Jenkins of Putney, L.
Airedale, L. Judd, L.
Barnett, L. Llewelyn-Davies of Hastoe, B.
Beaumont of Whitley, L. McIntosh of Haringey, L.
Blackstone, B. Mallalieu, B.
Brooks of Tremorfa, L. Mayhew, L.
Carmichael of Kelvingrove, L. Milner of Leeds, L.
Carter, L. Morris of Castle Morris, L.
Cledwyn of Penrhos, L. Mulley, L.
Clinton-Davis, L. Nicol, B.
Dean of Beswick, L. Peston, L.
Desai, L. Ponsonby of Shulbrede, L.
Donaldson of Kingsbridge, L. Rea, L.
Donoughue, L. Richard, L.
Dormand of Easington, L. Robson of Kiddington, B.
Falkland, V. Rochester, L.
Foot, L. Russell, E.
Gallacher, L. Seear, B.
Galpern, L. Sefton of Garston, L.
Graham of Edmonton, L. [Teller.] Serota, B.
Shackleton, L.
Grey, E. Shepherd, L.
Hampton, L. Simon of Glaisdale, L.
Hamwee, B. Stoddart of Swindon, L.
Harris of Greenwich, L. Taylor of Blackburn, L.
Hilton of Eggardon, B. Tordoff, L. [Teller.]
Hollick, L. Turner of Camden, B.
Hollis of Heigham, B. Whaddon, L.
Houghton of Sowerby, L. White, B.
Howie of Troon, L. Winstanley, L.
Irvine of Lairg, L. Young of Dartington, L.
Jeger, B.
Aldington, L. Howe, E.
Annaly, L. Lawrence, L.
Arran, E. Long, V.
Astor, V. Mills, V.
Balfour, E. Monk Bretton, L.
Belstead, L. Morris, L.
Blatch, B. Napier and Ettrick, L.
Boardman, L. Norrie, L.
Borthwick, L. Oxfuird, V.
Brougham and Vaux, L. Perry of Southwark, B.
Carnock, L. Pym, L.
Carr of Hadley, L. Reay, L.
Cavendish of Furness, L. Rees, L.
Cranbrook, E. Renton, L.
Cross, V. Seccombe, B.
Cumberlege, B. Shrewsbury, E.
Davidson, V. [Teller.] Skelmersdale, L.
Denham, L. Strange, B.
Denton of Wakefield, B. Strathclyde, L.
Ferrers, E. Strathmore and Kinghorne, E.
Flather, B. Sudeley, L.
Fraser of Carmyllie, L. Thomas of Gwydir, L.
Gray of Contin, L. Torrington, V.
Harmar-Nicholls, L. Ullswater, V.
Henley, L. Vivian, L.
Hesketh, L. [Teller.] Waddington, L.
Hives, L. Wynford, L.
Hooper, B.

Resolved in the affirmative, and amendment agreed to accordingly.

8.47 p.m.

Lord Hesketh

On the basis of the Division that has just taken place, perhaps I may suggest that it would be a good idea if we adjourn the Committee for five minutes for the usual channels to discuss further proceedings in your Lordships' Committee this evening. On the basis of that, I beg to move that the Committee do adjourn for five minutes.

Moved, That the Committee do adjourn for five minutes—(Lord Hesketh.)

Baroness Seear

May I ask the noble Lord why he has moved the Motion?

Lord Hesketh

In answer to the question of the noble Baroness, it has been agreed by the usual channels, including her own party's Chief Whip, whose suggestion it was. On that basis, I hope that she will accept the Motion that I have just moved.

On Question, Motion agreed.

[The Sitting was suspended from 8.49 to 8.53 p.m.]

Lord Hesketh

In the light of fruitful and rewarding discussions through the usual channels—

Noble Lords


Lord Hesketh

In the light of earlier agreements and understandings it has been decided that it would be better to complete our deliberations at this point. On that basis, I beg to move that the House do now resume.

Moved, That the House do now resume.—(Lord Hesketh.)

Lord McIntosh of Haringey

Before the Question is put, the Government Chief Whip does not mean "complete our deliberations" but that he intends that the Committee should stand adjourned until tomorrow.

Lord Hesketh

When the Deputy Chairman has moved back to the Woolsack I shall of course attend to the adjournment. At the same time I accept entirely the remarks of the noble Lord, Lord McIntosh. I was foolhardy to refer to the entire Committee proceedings rather than to the part of it that has taken place this evening.

On Question, Motion agreed to.

House resumed.

House adjourned at four minutes before nine o'clock.