HL Deb 19 October 1999 vol 605 cc937-46

3.12 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Lord Whitty.)

Lord Dixon-Smith

My Lords, yesterday, at the commencement of the Report stage on the Immigration and Asylum Bill, my noble friend Lord Cope of Berkeley, with the assistance of the noble Baroness, Lady Williams of Crosby, raised an issue which is becoming an increasing procedural problem for the House in its scrutiny of legislation. More and more often, at a late stage, we receive a largo volume of long and significant amendments to the Bills under consideration.

As a result of that intervention, the noble and learned Lord, Lord Falconer of Thoroton, speaking on behalf of the Government, raised what appeared to me to be a novel suggestion in relation to the procedures of the House. He suggested that any provision that should have gone to the Select Committee on Delegated Powers and Deregulation should be debated on Report, but that the Government would ensure that such amendments were not put on the face of the Bill at that stage so that the Select Committee would have an opportunity to discuss such amendments before they were put on the face of the Bill at Third Reading.

On the Greater London Authority Bill it is too late for that kind of an intervention to be practical. However, the Minister will be well aware that we have protested at the volume and the complexity of the amendments that we have been obliged to consider at short notice. In considering the Greater London Authority Bill today we shall find ourselves dealing with yet another series of amendments, many of which are extremely complicated.

It occurred to me that the House should seek an assurance from the Minister that none of the amendments already agreed or those that we may agree are such as would normally cause concern to that committee. If we do not proceed in that way we shall be in danger of overloading the relevant Select Committee.

I am prepared to accept that the Minister ill need time to consider his answer to that matter. We have two more days on which we shall deal with this Bill on Report, and I would be happy to receive a proper answer on one of those days, if he chooses to deal with the matter in that way. I believe that this is a proper point to raise at this stage and I hope that the House will accept it.

Lord Renton

My Lords. I rise in support of the important point that my noble friend Lord Dixon-Smith has raised. Will the Government consider the procedure that has been followed for years in another place, whereby any new clauses or any far-reaching amendments tabled after the Committee stage of a Bill has been concluded can be re-committed and examined in detail, subject to the Report stage procedure, before the Report stage of the Bill is undertaken? That works exceedingly well in the other place and ensures that the House is able to consider the detail of the new clauses or far-reaching amendments.

Viscount Cranborne

My Lords, perhaps the Minister could colour his reply with the thought that when noble Lords on this side of the House were in government—as has been the case during the life of the present Government—a convention grew up that governments were bound to take seriously the strictures of the Select Committee on Delegated Powers and Deregulation and that the committee's recommendations should be adopted.

With an enormous number of amendments being tabled, too often as a result of hurried legislation in another place, I believe it would be extremely helpful if the Government were able to respond to the intervention of my noble friend in the constructive way that other members of the present Government have responded—particularly the noble and learned Lord the Lord Chancellor—when considering the increasingly important role that that committee will have in the constitution of this House in terms of considering legislation and the way that it is examined.

Lord Whitty

My Lords, I accept that, as the noble Lord, Lord Dixon-Smith, says, we have a large number of amendments, some of which are fairly complex. I also accept that this House must give due respect to the views of the Select Committee on Delegated Powers and Deregulation.

However, as far as I can ascertain, the situation with regard to this Bill is different from that of the Immigration and Asylum Bill in that the amendments to that Bill created new regulatory powers which were not included at an earlier stage. We have amended some of those regulatory powers. I shall undertake to look carefully at those that remain to see whether we should take on board the point made by the noble Lord.

However, the vast majority of the amendments that were tabled early in the Report stage were tidying up and technical amendments, as the subsequent ones will be. Therefore, I do not accept that we are in a position where we should consider either recomittal or deferral of consideration of amendments because I do not believe that our amendments raise new issues of principle for the Select Committee.

Should it be drawn to my attention during the course of today or in respect of amendments yet to come, either by the noble Lord or by the authorities of the House, that I am over-generalising, then, before the commencement of the proceedings on Thursday, I undertake to correct that position and to take the necessary steps to ensure that consideration is given before completion of the Report stage.

On Question, Motion agreed to.

Clause 105 [Power to redistribute capital receipts of functional bodies]

Lord Dixon-Smith moved Amendment No. 318: Page 59, line 44, at end insert ("provided that no such payment may be directed to be made by a body until that body's debts have been fully repaid").

The noble Lord said: My Lords, Amendment No. 318 is grouped together with Amendments Nos. 319 to 326. They are all related to transparency, accuracy and accountability in relation to the capital expenditure programmes of the Greater London Authority.

Amendment No. 318 requires that capital debts of functional bodies should be paid off before capital receipts are transferred away from them. Amendment No. 319 requires that the available capital receipts be published in the Greater London Authority's budget. Amendment No. 320 requires grants between functional bodies to be published in the budget. Amendment No. 321 requires revenue grants to be specified in the component budget. Amendment No. 322 requires any transfers from the functional bodies to be added to and included in the capital spending plans. Amendment No. 323 requires the word "minimum" to be changed to "estimated" so that there is greater precision in the clause to which that relates. Amendment No. 324 is directed to the same purpose. Amendment No. 325 deals with the definition of the capital spending plan.

Amendment No. 326 is important because it deals with the comparison of performance on the capital spending programme year on year and, more importantly, the consequences of variations in capital spending year on year. Anybody who has had the experience of managing the capital programme of a large local authority—the Greater London Authority will certainly be a large local authority—knows that capital expenditure in its intimate detail is almost uncontrollable. There are many good reasons for that.

Capital spending programmes rely on access to sites which have to be purchased. That may be assumed to take only two or three months. It can often take much longer and difficulties then arise. The reverse also happens. One project in a plan is delayed and another project comes forward and is accelerated. The day-to-day management of all that is extremely difficult. Amendment No. 326 says that that should be looked at and recorded and, if there is an overspend in one year, it should be set out so that it is apparent what the consequences of that may be in any subsequent year.

This is an important group of amendments which significantly improve the Bill. I beg to move.

Lord Whitty

My Lords, similar amendments were tabled at Committee stage. This group of amendments would mean that a functional body could be required to give up part of its usable assets only if it had become debt-free. They would require the mayor to include in the capital spending plan a wide range of additional information.

Taken together, the amendments would greatly reduce the mayor's discretion in allocating capital resources to functional bodies and restrict the mayor's ability to take decisions on the allocation of resources in the year. They are therefore not acceptable to the Government. We require that flexibility for the mayor. The additional information required in the amendments would require the mayor to include in the plan information which could be given only if, at the time when he came to prepare the capital spend for the forthcoming financial year, he had made and was in a position to make firm decisions about the distribution of such resources.

The amendments would constrain the use of any power conferred on the mayor to redistribute the capital receipts of functional bodies, particularly Amendments Nos. 318 to 326. They would greatly reduce the mayor's discretion to manage the total resources of the authority and its functional bodies in a sensible way. They would disadvantage the functional body because they would remove that flexibility. The mayor needs to be in a position to help to meet the expenditure needs of the functional bodies which can change during the course of a financial year, as the noble Lord will acknowledge, by making grants available and helping with the redistribution of resources. They are not matters to be tied down in a plan before the financial year begins and would unnecessarily constrain the allocation of resources within the new authority. I hope therefore that the noble Lord will not press them.

Lord Dixon-Smith

My Lords, it is difficult to say that I am grateful to the Minister for what is a disappointing reply, but I am not surprised by it. I shall study what the Minister said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 319 not moved.]

Clause 106 [Capital grants between Authority and functional bodies]:

[Amendment No. 320 not moved.]

Clause 107 [Revenue grants between Authority and functional bodies]:

[Amendment No. 321 not moved.]

Clause 108 [Form and contents]:

[Amendments Nos. 323 to 326 not moved.]

Clause 109 [Preparation]:

[Amendments Nos. 327 to 329 not moved.]

Clause 113 [Proper financial administration and chief finance officer]:

Baroness Farrington of Ribbleton moved Amendment No. 330: Page 65, line 2, at end insert— ("( ) No person may be the chief finance officer of two or more relevant authorities at the same time.").

The noble Baroness said: My Lords, this group of amendments clarifies the arrangements for appointing chief finance officers for the GLA and functional bodies. I shall take each amendment in turn.

Amendment No. 330 provides that no one individual simultaneously may be the chief finance officer of the GLA and a functional body or of two or more functional bodies. This is needed to make absolutely certain that the GLA and functional bodies do not share chief finance officers. It is one of the key principles of the GLA finance system that each body is responsible for managing its own financial affairs once the GLA's consolidated budget has been set. Allowing the bodies to share chief finance officers would undermine that principle and could give rise to potential conflicts of interest.

Amendments Nos. 331 and 332 provide that the assembly appoints the GLA's chief finance officer and that the officer is designated from a member of staff appointed by the assembly rather than from staff appointed by the mayor. It has always been the intention that the assembly should appoint all three of the GLA's statutory officers, including its chief' finance officer, after consultation with the mayor. Without the amendment, the function of making the appointment would, by default, have fallen to the mayor.

Amendment No. 333 prohibits the mayor from being designated as the chief finance officer of TfL. though it allows TfL to appoint one of its members as chief finance officer rather than a member of staff. As the mayor may decide to chair TfL, he or she could be appointed as the body's chief finance officer. That would cause an unacceptable conflict of interest, given the mayor's policy responsibilities for transport and powers of direction over TfL and the chief finance officer's duty to ensure proper financial administration. The amendments tidy the provisions to appoint chief finance officers of the GLA and functional bodies to ensure that they give full effect to our intentions. I beg to move.

Lord Mishcon

My Lords, perhaps I may be permitted to ask what is apparent even to me is a silly question. Does it mean that a person could be a chief finance officer of one authority and a deputy chief finance officer of another?

3.30 p.m.

Baroness Hamwee

My Lords, perhaps I may add to the list of questions. I would not for a moment argue with the amendments which have been proposed; indeed, I think they are entirely right. It had not occurred to me that they were necessary. However, Amendment No. 333 gave me pause for thought. This is the amendment which provides that the mayor must not be the chief finance officer of TfL. Can the Minister confirm that, when one reads together the various provisions of the Bill, there is no functional body—or the authority itself—of which the mayor may be chief finance officer? In other words, can she confirm that this was a mopping-up provision and is not exceptional?

Baroness Farrington of Ribbleton

My Lords, in answer to the question from the noble Baroness, I believe I can confirm that the mayor cannot do so. That is my understanding of the situation. In answer to his question, I can tell my noble friend Lord Mishcon that I believe that the answer is no. However, I shall of course confirm that as soon as I am in a position to do so.

On Question, amendment agreed to.

Baroness Farrington of Ribbleton moved Amendments Nos. 331 to 334: Page 65, line 6, at end insert— ("( ) The chief finance officer of the Authority must be a member of staff appointed under section 56(2) above."). Page 65, line 6, at end insert— ("( ) The function of appointing the Authority's chief finance officer under subsection (2)(b) above shall be a function of the Authority which is exercisable on behalf of the Authority by the Assembly after consultation with the Mayor."). Page 65, line 6, at end insert— ("( ) If the Mayor is a member of Transport for London, he must not be its chief finance officer."). Page 65, line 6, at end insert— ("( ) In section 2 of the Local Government and Housing Act 1989 (politically restricted posts) in subsection (6)(d) (the effect of which is that the chief finance officer appointed under certain provisions is included among "the chief statutory officers" for the purposes of that section) after "section 112 of the Local Government Finance Act 1988" there shall be inserted ", section 113(2) of the Greater London Authority Act 1999".").

On Question, amendments agreed to.

Lord Dixon-Smith moved Amendment No. 335: Leave out Clause 113 and insert the following new Clause


(" .—(1) The Authority shall—

  1. (a) make arrangements for the proper administration of its financial affairs, and
  2. (b) secure that one of its officers (its "chief finance officer") has responsibility for the administration of those affairs and for the oversight of the financial administration of the functional bodies.

(2) Every functional body shall—

  1. (a) make arrangements for the proper administration of its financial affairs, and
  2. (b) secure that one of its officers (its "chief finance officer") has responsibility for the administration of those affairs.

(3) In subsection (1)(b) and (2)(b) above, the reference to officers includes a reference to employees or members of staff and, in the case of Transport for London and the London Development Agency, includes a reference to members of the relevant Authority.").

The noble Lord said: My Lords, this amendment suggests the deletion of Clause 113 and the insertion of what, in effect, would become a new Clause 113. Here one is dealing with what I suppose is really a matter of taste in drafting. There is a very significant difference between the two clauses—that is to say, the one which appears on the face of the Bill and the one that we have suggested should be in its place.

Clause 113 provides that there should be a "relevant authority", which means the authority, the GLA, or a functional body. It also provides that every relevant authority, shall make arrangements for the proper administration of its financial affairs", and so on. That is all very fine; indeed, it will undoubtedly produce an arrangement which works. However, what it does not do is something which our proposed alternative would do. It does not, in our view, provide for the finance department of the authority to have sufficient oversight as regards the financial affairs of the functional bodies.

The Minister will no doubt say that the functional bodies are free and independent and are perfectly entitled to keep their affairs to themselves and manage themselves, subject to the overall constraints imposed by the mayor's budget. That will work extremely well until something goes wrong. At that point, the lines of accountability, which, under the Bill, are blurred, may present a problem. We like our proposed amendment rather better for that reason. The lines of accountability under our clause mean that, in managing their fiscal affairs, the functional bodies would be subject to the overall supervision of, and ultimately sanctioned by, the authority. We think that that arrangement is preferable. I beg to move.

Lord Whitty

My Lords, as he said, the noble Lord's amendment would effectively ensure that the chief finance officers of the functional bodies reported to the chief finance officer of the GLA. We considered the alternative represented in the proposed new clause, but, contrary to the noble Lord's view, we felt that his proposition would be the one to blur the lines of accountability and add to confusion.

The mayor, subject to the assembly, will be responsible for setting the budgets of each of the four functional bodies but will not be accountable for the management of their financial affairs. That responsibility rests with the bodies and with the authorities themselves, as provided elsewhere in the Bill. For that reason, it is essential that the functional bodies—and, of course, the GLA—should each have their own chief finance officer. Each body and each authority will be responsible for ensuring probity, regularity, and so on, in financial management. Indeed, each will be expected to have regard to reports and recommendations made by its chief finance officer. As each functional body is responsible for its own financial affairs, it is not appropriate for the GLA's chief finance officer to have a further role in a functional body's finances. That would blur accountability and deprive each board and authority of a single source of specialist financial advice.

To reflect the mayor's interest, we have provided that where a chief finance officer of a functional body makes a report concerning a functional body he is required to provide a copy for each member of the relevant body, the mayor and the chair of the assembly. However, the responsibility for dealing with the report will rest with the board or the authority concerned, as made clear by the other provisions of the Bill. It cannot transfer this responsibility to the mayor, or indirectly to the mayor via the chief finance officer of the GLA.

We consider that the Bill provides for clearer arrangements for finance administration. Responsibility in that respect lies where it is set out in the rest of the Bill. The amendment could lead to a blurring of the lines of accountability rather than what the noble Lord seeks. I hope, therefore, that he will not press the amendment.

Lord Dixon-Smith

My Lords, I admit to a marginal intellectual weakness in our amendment—I am surprised that the Minister did not mention this—in that it could be argued that it is centralising. However, we are dealing with the way in which the Greater London Authority is to work. Nothing in our amendment would prevent the functional bodies keeping their own accounts; nor would it prevent their dealing with matters properly. It would have provided a proper line of control back to the authority. None the less, I hear what the Minister has said and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 116 [Functions of chief finance officer as regards reports]:

Lord Dixon-Smith moved Amendment No. 336: Page 65, line 38, leave out from first ("the") to end of line 42 and insert ("Chairman of Transport for London or, in his absence, the Deputy Chairman of Transport for London".").

The noble Lord said: My Lords, this amendment would work in relation to Clause 116, which deals with what is to happen to reports of financial irregularities in one of the functional bodies that might come from the Audit Commission. As drafted, the Bill provides that any member might be appropriate to be the person who receives such reports from the finance officer. Alternatively, I believe it says that an employee of the functional body could be the appropriate person. We do not think that that is a proper way to deal with reports as significant as such reports might be.

One hopes that these reports would be extremely rare and that preferably they never occur. However, if they do occur, it is our view that they should be dealt with at the highest level in the functional body; namely, by its chairman or deputy chairman. I beg to move.

Lord Whitty

My Lords, this requirement on the chief finance officer to consult with other officers of the authority in this clause seeks to ensure that there is agreement among the officers of the authority about the legality of the course of action being taken and all the relevant facts are clear. Where the chief finance officer completes a report about, say, the actions of Transport for London, the body must then consider it at a full meeting of the board. To require—as this amendment does—the chairman, and only the chairman, or his deputy to be consulted before the report is finalised would limit the discretion of Transport for London to appoint whom it sees fit to fulfil the consultation role, and appointments may change from time to time or from case to case.

The arrangements we propose will ensure that matters are considered properly and promptly by those with the necessary responsibility for taking action on them. I do not think that we should seek to limit the discretion of Transport for London to appoint whom it considers most suitable to undertake these consultation roles. The other amendment in this group proposes that, where a chief finance officer completes a report, the mayor should publish it within seven days. I understand the intention behind this amendment. It is important that the GLA and the functional bodies are publicly accountable for their actions and that all relevant reports are publicly available. However, I do not consider this amendment is necessary because, where a chief finance officer completes a report under the provisions of Section 114 of the Local Government Act, the authority or functional body must consider it at a meeting within 21 days. That meeting must be convened in accordance with Part VA of the Local Government Act 1972, which requires that generally details of the agenda and the reports themselves must be made available three days before the meeting. There is therefore already a deadline.

Specific provision has been made for Transport for London to be subject to the provisions of that section of the 1972 Act. It will therefore have to hold a public meeting in those circumstances within 21 days and make the chief finance officer's report available. The responsibility for publication rests—as I think it rightly should—with the authority and with each functional body. I believe therefore that this amendment is not necessary. I ask the noble Lord to withdraw both of the amendments.

Lord Dixon-Smith

My Lords, I hear what the Minister said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 337 not moved.]

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