HC Deb 01 March 1984 vol 55 cc275-8W
Mr. Chapman

asked the Secretary of State for the Environment whether he has anything to add to the proposals in the White Paper, "Streamlining the Cities", Cmnd. 9063, in respect of actions by the Greater London council and the metropolitan county councils which would create problems for successor authorities.

Mr. Patrick Jenkin

I am aware that there is some concern about the possibility that action by the Greater London council and the metropolitan county councils could adversely affect successor authorities and ratepayers. I am sure that the councillors concerned will be concerned to obey the law, to act responsibly, and to have regard to their responsibilities to the ratepayers. Moreover, the existing legal framework imposes some constraints on the actions of authorities; and we propose three further measures.

At present a London borough or metropolitan district council can itself seek to question the actions of the GLC or the metropolitan county council that precepts upon it by applying for judicial review. Applications can also he made by any person with an interest, for example, councillors, ratepayers, and non-ratepayers resident in the area concerned. If the court accepts that the application is well-founded and considers it in the public interest to do so, it will issue an order prohibiting the action or make a declaration that it is illegal.

In addition, under sections 19 and 20 of the Local Government Finance Act 1982, the auditor, acting on an objection by an elector or on his own initiative may seek a declaration from the court that expenditure is unlawful or that there has been loss due to wilful misconduct. It would then be open to the court to surcharge the local authority members responsible and to disqualify them from membership of a local authority. An elector for the area may also bring surcharge action if the auditor decides not to act following an objection by that elector.

To meet the concerns expressed by some of the successor authorities, we propose to include in the Bill to be introduced this Session a provision requiring the GLC and the metropolitan county councils to consult the borough and district councils in their areas before fixing their budgets and precepts for 1985–86. These will., of course, be implemented by the proposed transitional councils; and it is appropriate that the boroughs and districts which will appoint the members of these councils should be given an opportunity to express views on the financial situation which they will inherit.

We propose also, to give the London borough councils and the metropolitan district councils the same rights as electors have to object at the audit of the accounts of the GLC or the appropriate metropolitan county council. The borough and district councils will also be empowered to take action in the courts if the auditor decides not to do so. Such action could lead to surcharge and disqualification. These extended rights will apply only to the audits of the accounts for the years 1983–84 to 1985–86.

Finally, we shall include in the main abolition Bill, to be introduced next Session, two provisions concerning staff contracts. The first will ensure that any fixed-term contract of employment with the GLC or an MCC which is entered into after 1 March 1984, and which is to expire on or after 1 April 1986, will have effect as a contract which will terminate on 31 March 1986. The second will ensure that any terms which are incorporated into existing or future contracts of employment after 1 March 1984 and which relate to compensation for redundancy or detriment will have no effect where they would entitle an employee to an amount greater than that provided for, in due course, in the main abolition legislation.

These provisions will not affect the terms of existing contracts of employment. Thus. where staff have already been given fixed-term contracts with the reasonable expectation that they would run their full term, we shall provide for them to be compensated if they do not get jobs with the successor bodies. Similarly, any provision relating to compensation for redundancy or detriment already included in an existing contract of employment will be honoured.

I believe that members of the GLC and the metropolitan county councils will recognise that it is in the interests of their ratepayers and of their staff that they should act responsibly. But the measures I have outlined, together with the existing legal constraints, provide safeguards should any of the authorities concerned consider taking irresponsible action.

Mr. Silvester

asked the Secretary of State for the Environment whether he has anything to add to the proposals in the White Paper, "Streamlining the Cities", Cmnd. 9063, on the implications of his plans to abolish the Greater London council and the metropolitan county councils for staff at present employed by those authorities.

Mr. Patrick Jenkin

I have had two useful meetings with the TUC's local government committee. Detailed discussions have not yet begun on the proposals in chapter 4 of the White Paper; but there are three matters on which I can provide further details of the Government's intentions.

First, I recognise that a Staff Commission will have a particularly important role to play in this reorganisation. There has been widespread support for its establishment at the earliest opportunity. I propose therefore to include provision for such a body in the Bill to be introduced in the current Session. This will enable the commission to begin more quickly the process of consultation with interested bodies, and to provide me with general advice on staffing issues.

In previous reorganisations Staff Commissions have supervised ring-fencing arrangements. Such arrangements do not require successor bodies to recruit; they do, however, ensure that, if they decide to do so, they have to look first at candidates for the expiring authorities. One of the commission's early tasks would be to consider the introduction of ring-fencing arrangements to ensure that GLC-MCC staffs affected have a proper opportunity to obtain jobs with the new authorities.

Secondly, I propose that any compensation for detriment—where an employee moves to a new job on lower terms and conditions—will be paid in the form of a lump sum; we intend to consult on the detailed arrangements for determining this. We accept, also, that the costs of this compensation should not be borne by individual boroughs and districts who take on form GLC-MCC staff, but should be recouped from the ratepayers of each area as a whole.

Thirdly, there has been concern that some authorities might give staff artificial pay increases or regradings in the lead-up to abolition. This would be unfair: it would lead to inequitable treatment between staff. I intend, therefore, to include a provision along the lines of section 261 of the Local Government Act 1972 in the Bill to be introduced in the next Session. This would enable me to appoint a body to look into cases of alleged unjustified increases made after 1 March 1984 and to advise me. I would be able to act on that advice and direct an authority to withdraw an increase found to be unjustified. The following note sets out this proposal in more detail. This will not preclude authorities which wish to do so from paying temporary personal pay supplements to staff who face considerably increased responsibilities.

I hope that both employers and unions will come and discuss with us the proposals which I have outlined today and other matters of concern. It is clearly in the interests of the staff concerned that these matters are settled as soon as possible.

PROPOSED ABOLITION OF THE GREATER LONDON COUNCIL AND THE METROPOLITAN COUNTY COUNCILS: MEASURE TO PREVENT UNJUSTIFIED INCREASES IN PAY-GRADING In earlier reorganisations, particularly the reorganisation of London Government in 1964, some local authorities awarded extensive increase in pay or accelerated increments, or upgraded their staff when in the ordinary course of events this would not have been justified, so that these staff gained advantages in competing for jobs with the new authorities, or in claiming compensation for redundancy or for loss of remuneration on transfer to the new structure. In 1969 the Royal Commission on Local Government in England (Cmnd. 4040) took the view that steps should be taken to safeguard against such inequitable action; a power to prevent abuses was subsequently included in the legislation for the 1974 reorganisation. This was section 261 of the Local Government Act 1972. Concern has been expressed that artificial increases in pay-gradings might occur in the period leading up to the Government's proposed restructuring of local government in London and the other metropolitan areas. Wherever they occur, such increases are unfair. Not only do they place some staff at an advantage over others, but they place unreasonable burdens on ratepayers. The Government propose therefore to include a provision on the lines of section 261 of the 1972 Act in the Bill to abolish the GLC and the MCCs which will be introduced in the next Session. The measure will apply to local increases in remuneration of staff (other than teachers) in any authority affected by the proposed reorganisation (including both the authorities to be abolished and the London boroughs and metropolitan districts) which come into effect after 1 March 1984. As in 1974, it is not the intention to interfere with the normal established practice of regrading reviews nor with the justifiable provision of extra payments for any unusual burdens of work or responsibilities. Nor will the provision interfere in any way with the normal negotiating arrangements under which general increases in local authority remuneration are determined.

The provision will include:

  1. i. a power for the Secretary of State to designate—appoint an advisory body to look into cases of alleged unjustified increases in remuneration;
  2. ii. a power for the Secretary of State to instruct an authority to supply information necessary for the advisory body to carry out its statutory responsibilities;
  3. iii. a duty on the advisory body, where it finds that an unjustified increase has taken place, to recommend to the authority concerned a more suitable rate of remuneration;
  4. iv. a power for the Secretary of State to direct an authority to implement the advisory body's advice;
  5. v. a duty on authorities to comply with such a direction; and
  6. vi. arrangements to ensure that any late increases awarded by the expiring authorities immediately before 1 April 1986 which have not been investigated by that date, can be dealt with.