HL Deb 26 June 1984 vol 453 cc903-4WA
Baroness Gardner of Parkes

asked Her Majesty's Government:

Whether they will make a statement about the use made of powers under Section 137 of the Local Government Act 1972 by the Greater London Council and the metropolitan county councils.

Lord Bellwin

There is growing concern about the risk of action by the Greater London Council and the metropolitan county councils which could seriously damage both successor authorities and ratepayers. In particular, there are grounds for believing that some abolition authorities may seek to frustrate the Government's objectives by depriving themselves of major assets before they are abolished. The existing legal framework already imposes certain constraints upon the actions of local authorities. Moreover, the Local Government (Interim Provisions) Bill contains a number of provisions designed to limit the scope for obstructive or irresponsible actions by these authorities. But the Government believe it is now necessary to propose two further measures.

Clause 9(2) of the Bill already requires the Greater London Council and each metropolitan county council to consult its constituent councils about its proposals for expenditure and the financing of expenditure in the financial year beginning on 1st April 1985. We have had strong representations that this does not go far enough to protect the interests of successor councils. The Government have therefore tabled an amendment to this clause which will require the councils also to consult successor authorities on expenditure commitments beyond 1985-86.

Subsection (1) of Section 137 of the Local Government Act 1972 gives power to a local authority to incur expenditure for the benefit of their area or the inhabitants of their area for purposes not otherwise authorised. Subsection (2) enables local authorities to incur expenditure in making contributions to the funds of certain bodies and in respect to certain appeals to the public. It is feared that these powers might be used to enable an abolition authority to sell assets to a convenient, independent body which would repay the authority from grants made to it by the local authority under Section 137.

The Government have tabled a new clause which will require the GLC or a metropolitan county council to seek the consent of the Secretary of State for the Environment before making payments under Section 137 from 1st April 1985. Consent will also be required for any payment by any of these authorities as a result of a fresh commitment entered into from today which would fall due from 1st April 1985. The Secretary of State will not give his consent unless he is satisfied that it is expedient for the council in question to make the expenditure and, as regards expenditure under subsection (1) of Section 137, that the expenditure is in the interests of the council's area and any part of it or all or some of its inhabitants.

Section 137 is used for a number of purposes by the GLC and the metropolitan county councils. Much of the expenditure under this section goes to supporting valuable activities, for example in the voluntary sector. The Government's commitment to a responsible and effective voluntary sector is beyond doubt and I wish to make it clear that it is certainly not the Government's intention to use the new power, if enacted, to restrict the work of worthwhile voluntary sector activities.