§ Sir Rhodes Boyson
To ask the Secretary of State for the Environment what use he intends to make of his sanction powers under part III of the Local Government, Planning and Land Act 1980 against the direct labour organisation of the London borough of Brent.
§ Mr. Heathcoat-Amory
On 20 December 1989, my right hon. Friend the Secretary of State served a notice under section 19A of the 1980 Act on the London borough of Brent, setting out his view that the authority appeared to have failed to prepare the revenue account and statement of rate of return for the direct labour organisation's (DLO) activities in the financial year 1988–89; that it had failed to submit to him a report containing this information; and that it had failed to achieve the required rate of return on major new construction work.
My right hon. Friend has now considered the response which the authority has made to the section 19A notice, and accepts that the authority has now prepared the revenue account and statement of rate of return and has submitted the relevant report to him. He has noted, however, that the report shows that Brent's DLO made a loss of over £1 million on major new construction work in 193W 1988–89, following a loss of slightly less than £1 million on this work in 1987–88. He has further noted that the authority decided in July 1989 that the DLO should withdraw from major new construction work, but that the authority has not precluded the possibility that the DLO might return to this area of work in the future.
My right hon. Friend has concluded that the record of financial failure by the DLO is such as to provide no confidence that it could achieve the required rate of return on major new construction work in the future. He has therefore today given a direction under section 19B of the 1980 Act prohibiting Brent's DLO from carrying out major new construction work.