Fire Safety: Building Materials

Lord Bourne of Aberystwyth Excerpts

Tuesday 1st May 2018 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, in asking the Question standing in my name of the Order Paper, I refer the House to my relevant interests in the register.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the Government have taken advice from their expert panel on fire and safety on this report. The expert panel has advised that the report’s findings do not require changes to be made to the advice that has been given to building owners about actions that they should take. The programme to identify and make safe buildings with ACM cladding continues. The British Standards Institution has already sent the report to the relevant technical committee for review.

[Lord Kennedy of Southwark]

My Lords, the report of the Fire Protection Association, commissioned by the Association of British Insurers, highlighted that the official testing regime may have overlooked a number of real-life factors when conducting its tests on the appropriateness of the standard test for cladding materials. I hear what the Minister says, but will he look at whether there is a need to convene a committee to look at the British Standard 8414 test so we can be sure that the findings of the report have been considered carefully?

[Lord Bourne of Aberystwyth]

My Lords, I am grateful to the noble Lord. The relevant standard, BS 8414, was originally set in 2005 and has no doubt been effective. As I indicated, the report has gone to the relevant technical committee of the BSI for analysis. It will take a view on it and, if appropriate, refer it to the Government. That is the appropriate process. Of course we will take it very seriously when it gives us the report.

[Baroness Gardner of Parkes (Con)]

My Lords, is the Minister aware of the statement from the fire control chiefs that they are very concerned about the complete lack of checking for the short holiday lets occurring all over London? No one quite knows where they are.

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness is our side’s answer to the noble Lord, Lord West, for getting in these questions on pet areas. I appreciate what she says about short-term accommodation lets and I will ensure that that matter is looked at. I reassure her that the Short Term Accommodation Association, which I know she has taken a great interest in, looks at this sort of thing and is moving things forward in relation to the issues she has brought up previously, by starting a pilot agreement with Westminster City Council.

[Lord Stunell (LD)]

My Lords, I remind the House that I served as Minister with responsibility for building regulations between 2010 and 2012. Whatever controversy there may be about the adequacy of the fire tests, they have shown that more than 300 blocks need amending. According to the department’s own figures, 297 blocks have still not been repaired. Something like 7,000 families are stuck in them, facing not just the risk of fire but the reality of higher heating bills because of damp and condensation. None of those families brought this on themselves. Will the Government now agree to fund a “pay now, recover later” scheme so that there is no more delay in getting on with this process?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord gave very distinguished service in the role that he referred to. The issue of the standard we are looking at here is somewhat different from the ongoing work on the ACM cladding, which I think he is referring to. Work on 66% of the buildings in the public sector has been commenced and, for the remaining 34%, appropriate interim measures are place. We are identifying the blocks in the private sector, which I think is where the condensation issue that he talks about is relevant. We have provided £1 million to local councils to identify those blocks. In relation to whether the cost of that is borne by the landlord or the tenant, he will have seen that Barratt has stepped into the breach to help with Citiscape, which I applaud. In other areas we are hoping that landlords will step forward. Where they do not, we have a round table which will look at this issue across the piece.

[Lord Naseby (Con)]

Is my noble friend aware that this House will recognise the strength and fervour that he has shown in trying to get a grip on this quite complicated area? Requirement 8414 covers a whole host of materials used in the industry. It is not clear to me, or I am sure to a number of colleagues who take a particular interest, whether those who inspect those materials subsequently are necessarily clear on whether they meet the requirements of 8414 or not. Can some system be looked at to ensure that there is real co-ordination between the manufacturers of these important products and those who subsequently—some years later—carry out regular inspections on their consistency over time?

[Lord Bourne of Aberystwyth]

I am most grateful to my noble friend for his comments. In relation to 8414, the report particularly concerns external wall cladding systems—it is the whole cladding system, including the insulation, which has been looked at and referred to the relevant sub-committee for review. Of course we will take seriously the response from the relevant committee to the Government but the House should bear in mind that this report was issued barely a week ago.

Combined Authorities (Borrowing) Regulations 2018

Lord Bourne of Aberystwyth Excerpts

Tuesday 1st May 2018 Lords Chamber

Moved by

[Lord Bourne of Aberystwyth]

That the draft Regulations laid before the House on 12 March be approved.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I hope that the regulations will meet the same glad response that the previous order met with.

The draft regulations, if approved and made, will implement a commitment made by the Chancellor of the Exchequer to extend the borrowing powers of mayoral combined authorities that have agreed debt caps with Her Majesty’s Treasury. This extension of borrowing powers is an essential further step for mayoral combined authorities to be able to invest in economically productive infrastructure, giving local government the tools necessary to stimulate local economic growth and productivity.

Currently, primary legislation provides that combined authorities can borrow only for transport functions. Greater Manchester is the exception to this, as the combined authority inherited predecessor organisations’ borrowing powers for its fire, police and waste functions when these functions were transferred. In comparison, a local authority may borrow for any purpose relevant to its functions, or for prudent management of its financial affairs.

The Chancellor of the Exchequer announced in the Autumn Statement 2016 the extension of mayoral combined authority borrowing powers, allowing them to invest in economically productive infrastructure, subject to agreeing a borrowing cap with Her Majesty’s Treasury. This followed commitments in devolution deals to further consider the borrowing powers of mayoral combined authorities.

The regulations confer additional borrowing powers to the six mayoral combined authorities in Cambridgeshire and Peterborough, Greater Manchester, Liverpool City Region, Tees Valley, the West Midlands and the West of England. The regulations, if approved by Parliament and made, will allow each of these mayoral combined authorities to borrow in respect of all their existing functions.

The Local Government Act 2003 provides that combined authorities have a power to borrow for transport purposes. The Cities and Local Government Devolution Act 2016 amended the 2003 Act to provide for the Secretary of State to make regulations extending a combined authority’s power to borrow for other specified functions in addition to transport.

Each mayoral combined authority has a bespoke set of functions—powers—depending on the devolution deals that were agreed with the Government and the legislation approved by Parliament and made. Each of the six mayoral combined authorities has recently agreed a debt cap with the Treasury. Each agreed debt cap specifies the cumulative ceiling for the mayoral combined authority’s debt for each of the years 2018-19 to 2020-21, except in Cambridgeshire and Peterborough, where a new agreement will apply for 2020-21.

The Treasury’s requirement for debt caps reflects the Government’s ongoing commitment to balancing the books. Last week, the Office for National Statistics announced that public sector net borrowing has fallen to its lowest level for 11 years. All combined authorities are subject to the same statutory requirements for borrowing as local authorities, which are provided for in the Local Government Act 2003 and statutory guidance—the Act I just referred to. The prudential borrowing regime requires that an authority can borrow lawfully only if it can demonstrate that servicing and repayments of debt are affordable.

--- Later in debate ---

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I have no issue with the regulations before the House this afternoon and I draw the attention of the House to my relevant interests as a councillor and as a vice-president of the Local Government Association.

As we have heard, these regulations in effect implement agreements between the Government and the combined authorities referred to in this order to increase their borrowing powers for various functions as listed in the Explanatory Notes. The lists of additional borrowing approvals are different, as each deal is bespoke. I know that the Government like this bespoke deal arrangement, but I am of the opinion that the jury is still out on that way of working, as one person’s bespoke deal is another person’s confused muddle, with no one knowing or being clear why one authority has certain powers and another does not.

I also noted in the consultation, as referenced in the Explanatory Notes in paragraphs 8.1 to 8.26, that there are still very small numbers of people coming forward to give their views on these consultations. It might be that the numbers compare favourably with other consultations that the department has undertaken, but, if we are to give proper weight to the views of local people—and these areas have millions of people living in them—some of the numbers are derisory. We need to look at other ways of consulting people to get their views on the proposals coming forward. Having said that, I am happy to approve the regulations tonight.

[Lord Bourne of Aberystwyth]

My Lords, I thank all noble Lords who have participated in the debate on these important borrowing powers. I welcome their participation; it is most helpful and reflects the general support we have had for the Government’s approach and the flowering of these combined authorities and mayoralties—particularly in the north and the Midlands—to seek to redress the great growth of the economy in the south and, to some extent, East Anglia. It reflects the importance that we attach to ensuring that there is strong economic development elsewhere.

First, I turn to the points made by the noble Lord, Lord Jones. I thank him for his kind words and reflect on his distinguished service over a considerable period of time in Wales and, more broadly, in the Government in Westminster. He is right that these provisions are England-only, because the department is England-only, but he is also right that exciting and important things are happening in Wales and across the border between Wales and England, around the River Dee and Chester. Also, the North Wales Growth Deal looks to links with the northern powerhouse and the Borderlands Growth Deal encompasses southern Scotland as well as Northumberland and Cumbria. Working with the devolved Administrations in Edinburgh and Cardiff is very much on our agenda. I can reassure the noble Lord that I was in Wales just last Thursday, speaking to the Labour Economy Minister, Ken Skates, to discuss the Mid-Wales Growth Deal and possible links with the LEP in the Marches.

[Lord Jones]

Does the Minister agree that Mr Skates has made considerable advances in aiming for a better relationship between Whitehall and Cardiff?

[Lord Bourne of Aberystwyth]

I certainly do. I do not want to damage his future political career at this very sensitive juncture in Wales, but that would certainly be my reflection on things. My apologies to Ken if that does not help.

I thank the noble Baroness, Lady Pinnock, for what she expressed as her fundamental support for what we are doing here. I accentuate that the borrowing caps have been agreed with the constituent authorities, as well as the combined authorities. I note that she raised some issues, quite rightly, about the additional borrowing and asked for reassurance about the checks that exist. First, the cap has been agreed; as she will know, the Treasury is not generally profligate in these matters. Additionally, local authorities are already subject to a prudential borrowing code and regime, which will remain the case. The monitoring officer will be watching that like a hawk to make sure that it complies with the overriding requirement that the authority is able to pay back the debt that is concluded.

The noble Baroness is right that this varies from area to area; indeed, the noble Lord, Lord Kennedy, also made that point. These are bespoke deals. For example, there is a world of difference between Cambridgeshire, Peterborough and Liverpool City Region, so it is not surprising that there are differences between the areas in what is being devolved. The nature of devolution includes these electoral checks, done locally, and one has to trust that people will look after their area. It is the Government’s belief—widely shared in the House, I think—that these things should be dealt with at a level close to people’s jobs, homes and experience. That is precisely what is happening here. I note that the noble Baroness went on to talk about her positive welcome; I very much thank her for that.

The noble Lord, Lord Kennedy, also generally welcomed the borrowing powers. He noted, and I agree, that sometimes these consultations result in very few people responding. The same is true, sadly, of the number of people voting in local elections, which the noble Lord and I have discussed in other environments. I know that the average turnout is always higher in the noble Lord’s elections in Lewisham, for reasons we can only speculate on, but his point was fair. We often include a health warning and say that we are disappointed by the number of people who responded. Nevertheless, it is important that we go through that consultation exercise. I suggest that if we were doing something that was entirely off beam, the number of people responding would be greater. That is the experience. Nevertheless, it is a point well made.

I thank noble Lords for their general welcome for what are important powers for these combined authorities. I am not making a party-political point here, but I note the combined authorities’ success across the board. They are working well and are generally welcomed by the people in their areas.

The noble Baroness, Lady Pinnock, asked me to address future developments. We will be watching Sheffield. She is right that there are challenges there and, as noble Lords have seen, there is a challenge about the position of Yorkshire generally. We are looking at proposals that have been made relating to that. They have landed with us and we are looking at them. Obviously that is something we would want to discuss with the incoming mayor of the Sheffield City Region. It is not quite universal in Yorkshire. As the noble Baroness will know, Sheffield and Rotherham are not as warm about this as other authorities, let us say. That is what is happening there. We are aware that Leeds, for example, is the largest city without a mayoralty combined authority badge. It is important that that is put right.

We are looking more broadly at devolution now that we have, or will have shortly, eight combined authorities with the biggest cities, although not exclusively large cities, because Cambridge and Peterborough are somewhat different and we have a particular arrangement with Cornwall, where there is no mayoralty but there is a devolution deal. We are looking at that. In the fullness of time I expect to bring that back to the House for discussion. With that, I beg to move.

Motion agreed.

Growth Deals: North of Tyne and Borderlands

Lord Bourne of Aberystwyth Excerpts

Tuesday 17th April 2018 Lords Chamber

[Lord Beith]

To ask Her Majesty’s Government whether they have completed their consultation with local authorities and others about growth deals for (1) North of Tyne, and (2) Borderlands.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the North of Tyne authorities have completed their consultation on the devolution deal that the Government have announced they are minded to agree. The authorities’ summary of their consultation is with the Secretary of State for his consideration. Discussions on the borderlands growth deal are progressing well. The local area is working with the United Kingdom and Scottish Governments to develop a strong set of proposals for a growth deal that will drive growth and productivity in the region.

[Lord Beith (LD)]

My Lords, can the Minister tell us in what year those in charge of each of these projects will get the power to make decisions about what money can be spent in Northumberland? Why is the North of Tyne deal conditional on the creation of an elected mayor, when the borderlands deal has no such condition? Why have Northumberland residents, whatever consultation it is claimed there has been, not been sent any detailed information or consultation document about either the North of Tyne deal or the borderlands deal, even though they are supposed to be covered by both of them?

[Lord Bourne of Aberystwyth]

My Lords, they are very different in kind. The North of Tyne deal is clearly a combined authority mayoralty deal; it was always the case that it would come with a metro mayor. No date can be attached to it at the moment because, although we are minded to agree it, it is with the Secretary of State to consider the consultation—which has taken place and has been largely positive. As I have indicated, the borderlands growth deal is progressing well; there have been good discussions between the local authorities, the United Kingdom Government and the Scottish Government on where the deal is going. Subject to a robust business case being developed, we could expect funds to follow.

[Viscount Ridley (Con)]

My Lords, is my noble friend aware that Northumberland is one of the few counties without a university in it and that the Conservative-controlled county council has ambitions to put that right? Does he think that that should be encouraged?

[Lord Bourne of Aberystwyth]

My Lords, I had not given particular thought to that question until the noble Viscount addressed it to me. Of course, there are two terribly good universities in Newcastle, as we know, but I am pleased to hear about the consideration being given to a university in Northumberland.

[Lord Watts (Lab)]

My Lords, are the Government not making a mess of this? Some areas have mayors; others do not. Some have powers that others do not. Should we not bring them all together so that there is some common sense in this issue?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord has gone in this direction before. It is clear that some metropolitan areas are well suited to mayors, as we have seen from Birmingham, Manchester and others developing metro mayors. Other areas do not lend themselves to that, so we would not expect one size to fit all.

[Lord Clark of Windermere (Lab)]

My Lords, can I come to the aid of the Minister? The difference between borderlands and the others is basically that borderlands encapsulates two nations: if you had a mayor, your mayor would have to cover an area from Stranraer right down to the Lancashire border just outside Lancaster: it just would not make sense.

[Lord Bourne of Aberystwyth]

My Lords, I am very grateful to the noble Lord: that indeed is a distinction, but it is not the only one. They are very different in nature. One covers a much broader sweep of powers, in terms of housing, health and so on; the other is essentially business focused. Of course, the noble Lord is absolutely right that the borderlands deal does involve the south of Scotland as well as Northumberland and Cumbria, and that is another important distinction.

[Lord Mackenzie of Framwellgate (Non-Afl)]

My Lords, does the Minister agree that the north-east is not all doom and gloom? Will he congratulate, on my behalf and on the House’s behalf, the chief constable of Durham, Mike Barton, and all his police and civilian staff on being an excellent force for the third year running as a result of the HMI inspection?

[Lord Bourne of Aberystwyth]

My Lords, I am very grateful to the noble Lord. I am very happy to join those congratulations. It is absolutely right, and certainly the north-east is far from being all doom and gloom. There is very good progress in the north-east on a number of fronts, not least on developing the mayoral deals and business growth, as can be seen.

[Baroness Maddock (LD)]

My Lords, has the Minister read reports in recent days that the A1 from London to Edinburgh is the most dangerous road in the country? Does he agree that, if we are serious about growth in north Northumberland, we need to get on and dual the A1 north of Alnwick and across the border in Scotland?

[Lord Bourne of Aberystwyth]

My Lords, the noble Baroness is right about the need for investment on the A1. I think that in 2014 we committed funds for improvements on the A1 from Newcastle to Berwick, from memory, but she is absolutely right that it is work in progress and it is important that we bear that in mind.

[Lord Foulkes of Cumnock (Lab)]

My Lords, is this not a dog’s breakfast? Does the Minister remember that, when he was on the Back Benches, he and I agreed—in fact, we were lobbying hard—for reorganisation of local government in England, for devolution in England on some kind of systematic, logical basis? Why has he changed his mind?

[Lord Bourne of Aberystwyth]

My Lords, I am not sure that I have changed my mind, but the noble Lord is assuming that that is the case. There is unfinished work on this, but that does not mean—in fairness, the noble Lord did not say so—that these deals are not important deals and very valuable for Scotland, the north of England and, indeed, the rest of the country. They are ways forward in terms of giving power to local areas which I think the noble Lord should welcome.

[Lord Wallace of Saltaire (LD)]

My Lords, can the Minister tell us a little more about the criteria for deciding when a mayor is and is not appropriate? If, for example, we take Yorkshire, which is now congealing around the idea that a one-Yorkshire deal is the most appropriate way forward, with a population roughly the same as that of Scotland, does he think that a mayor is then appropriate, or is something different required for an organisation such as that?

[Lord Bourne of Aberystwyth]

My Lords, on the general point about how we decide whether it is appropriate, we depend on grassroots support for a deal. There has been support, as the noble Lord has indicated in relation to his specific point about Yorkshire, for an all-Yorkshire deal. We have made a compromise proposal to the authorities and have not yet had an agreed response. We are progressing, as the noble Lord will know, with a south Yorkshire deal, after which it will be open for a broader deal which could cover the whole of Yorkshire, but we are still working on that.

[Lord Beecham (Lab)]

My Lords, growth in the north-east at any rate depends very heavily on vast improvement to the rail connections between that region and the rest of the country, particularly the north-west. When is this going to happen? Will the Government answer a question I have repeatedly asked: if Scotland goes for abolition of air passenger duty, will that also be extended by this Government to airports in the north-east?

[Lord Bourne of Aberystwyth]

My Lords, on the first point, I will need to get back to the noble Lord on the specifics of the rail link. I cannot recall him asking that question previously, but I will make sure that he gets a detailed response on that. Similarly, on the airport question, I welcome the commitment we have had in relation to Carlisle, which no doubt the noble Lord would also welcome. In relation to air passenger duty, this is an ongoing discussion with the devolved Administrations, and I know that it is a live discussion in Wales as well.

Housing and Planning Act 2016 (Database of Rogue Landlords and Property Agents) Regulations 2018

Lord Bourne of Aberystwyth Excerpts

Tuesday 17th April 2018 Lords Chamber

[Lord Best (CB)]

My Lords, I declare my interests as listed on the register. I am full of regret about this statutory instrument but I want to preface my remarks by giving some credit where it is due. We have seen the exponential growth of private renting: the PRS has gone from 9% at the beginning of the 1990s to about 20% of the stock of this country now. As mentioned by the noble Baroness, Lady Grender, the report published today by the Resolution Foundation shows that an awful lot of people will rent all their lives, even those on relatively decent incomes.

Private renting has become very important and government has woken up to this fact. We have had a plethora of measures coming down the pipeline, and I welcome each of them. Enumerating them all would take some time, but they include the letting fees ban, which has already been mentioned, and compulsory client money protection, which will make a big difference to the world of letting and managing agents. We have also had the banning orders themselves, which are very important, never mind the publicity around them. There is the promise of a tenants’ ombudsman handling complaints from tenants about their landlords. That is coming down the pipeline. Physical things such as smoke alarms are becoming compulsory on every floor and some carbon monoxide alarms are becoming compulsory. This Government have introduced a lot of important new legislative measures. When it comes to licensing, which is absolutely where we should be, local authorities should be empowered to license the landlords in their areas and collect some funds to pay for the enforcement that needs to follow.

I went on a dawn raid with Newham Council to see the things that such raids reveal—horrendous conditions. However, a licensing system could find out which properties were let in appalling conditions and who was not paying any council tax or anything to HMRC, whose representatives came on the dawn raids as well and whose teeth are sharper than anyone else’s. We now have measures in place. The Government have allowed Newham to renew its licence for almost the whole of the borough and the Government are on the right track, so I preface any remarks by saying that the Government are bringing forward a whole number of measures. We may have reached the point where a consolidating Bill to bring all these things together would be rather a good idea.

However, we depend on the local authorities enforcing all these measures. I speak as the guilty person who piloted through your Lordships’ House the Homelessness Reduction Bill, now an Act, and I know that that brings tremendous new burdens on local authorities in relation to the private rented sector. Local authorities have a lot on their plates, and adding more to that needs to be accompanied by the resources to really make things happen. Local authorities can rightly complain if the Government do not come up with the money to follow each of these new measures.

We have the banning orders, which are great, but we are unable to get a register of those who are banned publicised far and wide. I do not like to mention the Housing and Planning Act because it brings back some horrendous memories, but three questions are answered at the back of the guidance for local authorities, Banning Order Offences:

“Should local housing authorities make public banning orders for individual landlords? We would encourage local housing authorities to make successful banning orders for individual landlords public”.


The guidance continues:

“Can a local authority make public a banning order for a business? Yes. Any business (managing or lettings agency) which has been subject to a banning order can be named publicly … Should local housing authorities make information on banned landlords available on request by a tenant? Yes. We would encourage local housing authorities to make information on banned landlords available on request by a tenant”.


That all sounds good but then we get this feeble statutory instrument, which seems to negate that and make it rather difficult for local authorities, which get legal advice to be cautious about publicising these banning orders that are so important. I think the culprit, which I have dug out today, is Publicising Sentencing Outcomes from the criminal justice system, which is guidance for public authorities on publicising information about individual sentencing outcomes. I suspect that the Minister is as frustrated as the rest of us that more cannot be done to achieve the publicity that this demands. I hope he will join the rest of us in voting in favour of this Motion of Regret.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank the noble Lord, Lord Kennedy of Southwark, for tabling a Motion on this important topic. I am genuinely very grateful to him for doing so because it has given us an opportunity to revisit this area and give some publicity, I hope, to where we are. I am grateful for the contributions that have been made by noble Lords. I will first try to set out our current position and then take up some of the points made by noble Lords and answer where we hope to go. I share some of the frustration that it sometimes appears that we are moving very slowly. I understand what the noble Baroness, Lady Grender, means, and I pay tribute to what she has done on letting agents. It is frustrating for Ministers too, on occasion, but of course there is a process to follow.

The Government value the private rented sector. It is an increasingly important part of our housing market, as was said by many noble Lords, most recently by the noble Lord, Lord Best. As the noble Lord, Lord Kennedy, said in setting out the case, the sector has doubled in size over the past decade and now provides a home for 20% of the population in England, which is approximately 4.7 million households. It is significant.

As has been acknowledged, the overwhelming majority of landlords in the private rented sector provide decent and well-maintained homes. Standards have improved rapidly with the proportion of tenants living in non-decent housing falling from 47% in 2006 to 27% in 2015. In addition, 82% of private renters are satisfied with their accommodation and stay in their homes for an average of just over four years. The Government want to support good landlords. That point has been widely acknowledged.

However, a number of rogue landlords knowingly rent out accommodation which is unsafe and substandard. Overcrowded and poor-quality housing has a wider impact on the local community as it can result in excess noise, increased demand on local services such as waste collection, and anti-social behaviour generally, as well as the dreadful impact that it has on the individuals who live in those premises. These landlords and property agents often do not respond to legitimate complaints made by tenants. Some would even prefer to be prosecuted rather than maintain their properties to a decent standard. These practices damage the reputation of the sector and have no place in modern Britain. We are determined to force rogue landlords out of the rental market. This Government have a strong track record in cracking down on rogues and driving up standards in the sector.

I thank the noble Lord, Lord Palmer of Childs Hill, for the cross-party working that we have had across the Floor with all noble Lords in this House and in the other place. I am happy to commit to continue that. In the plethora of measures referred to by the noble Lord, Lord Best, we have had considerable support from around the House and joint action to get us into a better position. We have introduced a package of measures to tackle rogue landlords. This includes civil penalties of up to £30,000, rent repayment orders under which a landlord can be required to repay up to 12 months’ rent, banning orders for the most serious and prolific offenders and a database of rogue landlords and property agents.

The noble Lord, Lord Beecham, asked about the definition of a rogue landlord. I will pick that up more specifically in correspondence, but I assure him that banning order offences include many of the things that he referred to. For example, the Rentokil situation would be covered by an improvement notice. If he would like to give me details of that case, I will gladly have a look at it. It also includes criminal damage and eviction. In short, I think that the definition he quoted does not cover quite a few situations that are banning order offences. I will cover that more generally in a letter to noble Lords, if I may.

Evidence on the effectiveness of these new powers is anecdotal, but we know that many local authorities have used the new powers that came in last year very effectively. Torbay Council, for example, used revenue from civil penalties to fund additional enforcement staff, which is a sensible move. We provided £12 million between 2011 and 2016 to over 60 local authorities to help them tackle acute and complex problems with rogue landlords. I have seen some of those issues myself as I have gone around the country. I know that they exist and I know that enforcement action does happen. It has been taken against over 5,000 landlords between 2011 and 2016. That represents a significant proportion of rogue landlords active in those areas.

We have also introduced protection for tenants against retaliatory eviction in the Deregulation Act 2015, and required landlords to install smoke alarms on every floor in the Energy Act 2013, as was noted by the noble Lord, Lord Best. The tough measures that we introduced through the Housing and Planning Act 2016 enable local authorities to crack down on these rogue landlords and drive up standards in the sector.

Since April 2017, local authorities have been able to impose a civil penalty of up to £30,000 as an alternative to prosecution where a landlord has failed to comply with an improvement notice in relation to the licensing of houses in multiple occupation, contravened an overcrowding notice or failed to comply with management regulations in respect of houses in multiple occupation. Crucially, local authorities have been given the ability to step up their enforcement action by allowing them to impose the civil penalties I have mentioned.

Non-Domestic Rating (Rates Retention and Levy and Safety Net) (Amendment) Regulations 2018

Lord Bourne of Aberystwyth Excerpts

Thursday 29th March 2018 Lords Chamber

Moved by

[Lord Bourne of Aberystwyth]

That the draft Regulations laid before the House on 8 February be approved.

Considered in Grand Committee on 27 March.

Motion agreed.

European Union (Withdrawal) Bill

Lord Bourne of Aberystwyth Excerpts

Committee: 11th sitting (Hansard): House of Lords
Wednesday 28th March 2018 Lords Chamber

[Lord Griffiths of Burry Port]

I was hoping that that was an intervention—I am better prepared for interventions than I was last time.

I simply hope that, when all is said and done, the fact that this is about money—even if the guarantees and figures cannot be given in a debate such as this—will indicate the desperate need felt in Wales for some support and encouragement. There must be a promissory note for adequate support that will be met once we are no longer in Europe for the activities that up to now Europe has helped us with so generously.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I thank the noble Lord, Lord Wigley, for tabling these amendments and all who have participated in what has been a free-wheeling, free-ranging debate covering an awful lot of important areas, some which I perhaps in all fairness could not have anticipated when I read the amendments.

The noble Lord, Lord Griffiths of Burry Port, is absolutely right that in debating something geared specifically to Wales we should recognise the enormous contributions made by Lord Richard and Lord Crickhowell, both of whom sadly died recently. Sometimes in similar ways but in differing ways in other respects, both made enormous contributions in Wales and to devolution. Lord Richard is certainly massively missed. He made an outstanding contribution on the Richard commission in relation to devolution but in so many other ways in public life as well.

I will first turn to the amendments and then try to do justice to the many wide-ranging points made during the debate. The noble Lord, Lord Wigley, was described as “terrier-like” and as getting the last bit of marrow out of the bone. As someone who has often broken bread with him, I thought that conjured up an extraordinary vision of him. For many years, he has certainly fought hard for many issues in public life, not least for Welsh principles and rights, both here, in the Commons and in the National Assembly for Wales. I think that is acknowledged across the political divide and by people with no politics at all. He continues to make an extraordinary contribution.

The amendments would require the United Kingdom Government to produce a report outlining how EU funding provided to Wales will be replaced once we leave the EU. They would mean that the entire Bill could not be brought into force pending the publication of such a report.

While I understand the desire for as much clarity as possible—I shall say something about cohesion funding shortly—I do not consider such a step necessary in view of the considerable funding assurances the Government have already made to all parts of the United Kingdom. I recognise that there is an issue here that goes broader than Wales. There are certainly issues relating to Cumbria, as has been mentioned during the debate, Cornwall, Merseyside, Scotland and so on—this affects many parts of the United Kingdom, although the amendments are for understandable reasons addressed to the needs of Wales, which I can strongly identify with.

The agreed implementation period to the end of 2020 will see the UK participate in 2014 to 2020 EU funding programmes until their closure. In the case of some of those projects, that will mean the end of 2023. It will not be beyond 2023, but it could mean funding for those programmes that remain open during that funding programme until the end of 2023. The projects would receive their full allocation of EU funding during that period—that is an agreed position as things stand.

This approach ensures that projects are not disrupted and no community misses out. The noble Baroness, Lady Humphreys, was there at the start of the Assembly as were the noble Lord, Lord Wigley and I, and saw the benefit of such funding—I fully recognise many of the examples that she gave. In the area that I represented in west Wales, there were massive benefits. No community would miss out. British businesses and potential investors have certainty and stability up to the end of projects running to 2023.

In the longer term, the Government have further committed to maintain cash farm funding until the end of this Parliament, taking us beyond 2020, which provides the sector with more certainty than in any other part of the EU as things stand. The Government will also create a UK shared prosperity fund to reduce inequalities between communities across the United Kingdom and deliver sustainable, inclusive growth. The Government intend to consult on the design of this United Kingdom-wide fund during 2018. That will of course, quite rightly, mean engagement with the Welsh Assembly through the Welsh Government and, similarly, the Scottish Parliament through the Scottish Government and with others who would expect to be consulted in that process.

[Lord Liddle]

Can the Minister tell us anything about the timing of consultation papers on the shared prosperity fund? When are they likely to appear? Particularly in relation to the debate on Brexit, are we likely to see what is proposed before the final decisions that we have to make at the end of this year?

[Lord Bourne of Aberystwyth]

The noble Lord makes a fair point. I do not know the specific answer, but I will cover it in a letter to all Peers who have participated in the debate on these amendments, and place a copy in the Library.

[Lord Thomas of Gresford]

Perhaps the Minister can answer this question. Is the UK prosperity fund—which I think was in the last Conservative manifesto—intended to be administered or distributed on the basis of need or a population count?

[Lord Bourne of Aberystwyth]

My Lords, it certainly was in our last manifesto. As I have just indicated, it talks about reducing inequalities, so the noble Lord has that comfort. Again, I will ensure that any points not dealt with in my answers will be covered in a letter to all Peers who have participated on these amendments, a copy of which will be placed in the Library.

The noble Lord, Lord Wigley, made some points about cohesion funding, which dates back to 2000. I remember when the noble Lord was leader of the opposition in the Assembly and I was leader of the Welsh Conservatives—I later became leader of the opposition. I too went out to Europe and fought for this with Michel Barnier. I also remember the struggles that we had with the Treasury; that was accurately reflected. I agree with the noble Lord, Lord Thomas, on this point, which the noble Lord, Lord Wigley, made in the Assembly on many occasions. Such funding was not a badge of pride: it was coming to Wales because of the poverty that was experienced in west Wales and the valleys. It was not limited to Wales: Cornwall, Merseyside and so on were also involved. This was something that we did not really want to qualify for. There will be another round of funding from 2021 to 2027 and I will look at how that pans out. It is not guaranteed, even in European terms, that Wales will qualify. We were somewhat surprised in the last round of funding—it was very marginal—that Wales just managed to qualify. In one sense we were pleased, because to just qualify rather than just miss was welcome. We have to remember that there is no automatic right to it. It is based on 75% of average prosperity throughout the European Union.

There were some free-ranging points made about the referendum campaign—I remember the campaign in Wales as a campaigner for remain—but I will focus on the parts of the debate that were more central to the amendment and the legislation. First, however, I will touch on some of the funding that is coming to Wales. As a Welsh Office Minister, I know that we are participating very much in mid-Wales growth deals, north Wales growth deals and city deals. Stuff is going on which is helping projects in Wales now and engaging with the NFU, the FUW, the CLA and so on. Many things are happening in Wales that I am sure noble Lords across the Chamber would be pleased about.

Points were made about the Barnett formula. Lord Richard would have had much to say on this and we come back to it on many occasions. However, the issue exists independently of Europe and it is not made better or worse by our position in Europe. It does need addressing. In fairness, as part of the coalition in the previous Parliament, we ensured that the formula was ameliorated by the application of the Barnett floor, which benefited Wales. That said, I recognise the points about the historic position of Wales, unlike Scotland which benefits from the Barnett formula. I will leave that for another day, if I may.

The noble Baroness, Lady Humphreys, was there at the start and very much engaged with ensuring that we got the benefits of Objective 1 into Wales. In parenthesis, the giving of taxation powers to Wales, which was part of the coalition Government and the Silk commission and is now in process, should help to incentivise growth in Wales and is part of the added powers that have been given to the National Assembly for Wales. We should not fail to recognise that a lot of these issues are things that the National Assembly now can, and I have no doubt will, ameliorate.

The noble Lord, Lord Roberts, made a valid point about Welsh agriculture being much dependent on agricultural funding. I hope he takes comfort from what I have said about the agricultural budget up to the end of the Parliament. He is right that we have to focus on it. In fairness, it is not just a Welsh issue but, as he rightly recognises, it is central to a lot of Welsh life and many areas and close to the hearts of people in Wales.

The noble Lord, Lord Liddle, mentioned the Cumbrian situation and touched on federal issues. I can promise that just as I would take a call from Sadiq Khan, I would take a call from the noble Lord. If he wants to ring on any issues, I would be very keen to do that. I think Wigton is extremely important.

The noble Lord, Lord Adonis, referred appositely and correctly to the weak voice of England in our structures. I think that the noble Lord, Lord Foulkes, by inference touched on the incomplete part of the jigsaw in that we do not have regional voices for England, or not in the same way that exist in Scotland, Northern Ireland and Wales.

I perhaps take issue with the noble Lord, Lord Adonis, about the unknown mayor of Birmingham. I think that would be a surprise to many people. Many people know that it is Andy Street, just as we all know Andy Burnham. I do not think it would be quite right to refer to them as colonial governors, either.

[Lord Adonis]

My Lords, I was referring to the then Leader of Birmingham City Council who is now also a Member of your Lordships’ House.

[Lord Bourne of Aberystwyth]

And a very able one. I take that qualification and thank the noble Lord for it.

It is also worth saying that there were attempts to extend regional government to England. I am sure we all remember the referendum in the north-east, which was pretty decisive. I accept that there are issues to address there. This Government have done more for city mayors than has been done for a long time in terms of devolved power and not just in the big cities of the UK. We have looked at other areas—Cambridgeshire, for example. However, there is incomplete work—including in Yorkshire, it is fair to say.

I agree with the noble Lord, Lord Foulkes, that the Falkirk Wheel is well worth visiting. I also agreed with him on other issues that he mentioned in relation to the unaddressed issues about government in our country—some points well made.

I thank the noble Lord, Lord Thomas of Gresford, for his contribution and agree that we fought for money for Wales. It was not a matter of pride, it was a matter of getting money that was needed. I agree that in many ways the money is still needed because of the relative poverty in Wales—sometimes a poverty that is not obvious. The grinding poverty that exists in the Valleys is obvious, but the poverty in the rural communities of north-west and south-west Wales is not necessarily as obvious.

I thank the noble Lord, Lord Griffiths of Burry Port, for his contribution and for re-focusing us on some of the issues that matter. He referred to the history of some of the devolution process in Wales—the 1997 referendum, the 2011 referendum and much work that was done in-between. He is right that there is a money issue. I do not think it is just a money issue; it is also an attitude issue that has existed prior to this Government and probably the previous Government. In short, I think it is ameliorated. There is an attitude of: “Let’s not forget Wales, let’s not forget Scotland”. It has become lot better; it is plugged in. That is not to say that we are there yet. It is not just a money issue, though money is important too.

The noble Lord mentioned the Barnett formula. A lot of good work has been done in the past by Gerry Holtham and the Holtham commission, but there are issues which remain to be addressed—that is no doubt true. He went on to talk about the consenting process, and I take it that he means the process referred to in Clause 11. I agree that this is a partnership and, in fairness, the Prime Minister is very much aware of that. She met the First Ministers of Wales and Scotland very recently, and I think progress was made. More work needs to be done and is being done. We are not there yet. I think that anyone who is fair minded would acknowledge that we have made considerable progress on this but, as I say, we are not there yet.

I appreciate that the noble Lord, Lord Wigley, may regard this as half a loaf—it is not everything he wants—but I am happy to talk to him between now and Report and to find answers to some of the questions put by the noble Lord, Lord Liddle, about the timing of this process. I hope that helps the noble Lord: I thank him for bringing this important issue to the House. I thank other noble Lords for their part in this. While the present team and I remain at the Wales Office, we are determined to ensure that Wales gets a fair deal. I am sure that applies to the Scottish and Northern Ireland teams in relation to Scotland and Northern Ireland. We have to ensure that all parts of the United Kingdom are taken care of in this. We do not want this to be x versus y: everybody has to be fairly dealt with. On the basis that I am happy to try to find more information for the noble Lord, Lord Wigley, and others, I hope that the noble Lord will withdraw his amendment.

[Lord Wigley]

I am very grateful to all noble Lords who have taken part in this debate, which was rather longer than I expected. Perhaps I set the wrong precedent in my own speech. I thank the noble Lords, Lord Liddle, Lord Roberts of Llandudno, Lord Adonis, the noble Baroness, Lady Humphreys, of course, as well as the noble Lords, Lord Foulkes, Lord Thomas of Gresford and Lord Griffiths of Burry Port, and the Minister, for their comments. I am grateful for the acknowledgment of the importance of the issue. In response to the noble Lord, Lord Cavendish, whose interventions I followed with interest, I recognise, as we all do, that other parts of the UK have specific needs which should be addressed as well. We need a mechanism to do that. In the context of the current round of European funding, on top of the CAP, there is a particular impact on Wales, which was what I wanted to highlight.

I suggest to the noble Lord, Lord Bourne, that, in the fullness of time and having thought a bit more about this and discussed it with his colleagues, the Government might be minded to bring forward a White Paper, or a publication of some sort, laying out how funding coming from Europe will be replaced. This would not be just for Wales but for other areas as well, and not just for the period from now until 2019 or 2021—whichever is the end of the transition period—but their ongoing intention after that. As the noble Lord, Lord Foulkes, said, the timing is important. I identify with the comments made about the late Lord Richard and the late Lord Crickhowell who, in their different ways, both made considerable contributions to Wales. I am sure that, if they were here today, they would be taking an active interest in these issues.

The noble Lord, Lord Bourne, knows enough about the feelings in the National Assembly about European funding to realise that this is a real issue that can make a difference, not just a political football. We can certainly argue about how the money is used and how it is used in Merseyside, south Yorkshire or Cornwall, where it is used in different ways, sometimes with better results. We need the resources because we are not going to get them elsewhere. They have to be replicated somehow. The question of trust has arisen in a number of contributions. Before the noble Lord, Lord Bourne, entered the Chamber there was another issue regarding money from the Treasury—the aggregated capital funding that Wales was accumulating in the National Assembly to avoid the wastage of year-end expenditure and put it into capital projects. That money was taken back by the Treasury on the basis that we had no right to aggregate money from other headings to fund capital projects. That is the sort of breakdown of trust that we are talking about, and we have to make sure that those attitudes are not exemplified in the ongoing period.

I hope that over the coming two or three weeks it will be possible to see whether a different formulation of this amendment can be tabled on Report, bringing in other parts of the United Kingdom and perhaps other parties. I invite the Front Benches of the various parties and individuals on the Cross Benches to consider whether that may be possible, and to do so with the positive intention of achieving a meaningful step forward as a result of the debates here that will help Wales and all other parts of the United Kingdom to find a way through the consequences of leaving the European Union. On that basis, I beg leave to withdraw the amendment.

Community Football Clubs

Lord Bourne of Aberystwyth Excerpts

Wednesday 28th March 2018 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and in doing so refer the House to my relevant interests and also make clear that I am a member of the Dulwich Hamlet Supporters’ Trust.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

Congratulations. My Lords, local authorities should assess the risks posed to sports facilities by development in their areas. We are clear in the National Planning Policy Framework that access to high-quality sports and recreation facilities is important for the health and well-being of communities. Planning policies should be based on robust assessment of what an area needs and should make it clear that facilities should be protected.

[Lord Kennedy of Southwark]

My Lords, Dulwich Hamlet is a much-loved non-league football club based in Southwark, where I grew up. It was founded in 1893, which is 125 years ago. Does the Minister agree that the present situation is tragic, with the club locked out of the ground, and that the best way forward is for all interested parties to get around the negotiating table and reach an agreement that gets Dulwich Hamlet playing football again at Champion Hill?

[Lord Bourne of Aberystwyth]

Yes. The noble Lord will be aware that my honourable friend Tracey Crouch, the Minister for Sport, in answering a debate in the other place, indicated that she was minded—indeed, determined—to find and appoint an independent mediator. I would be happy to meet with the noble Lord to discuss how we can carry this forward; I very much support what he is up to.

[Lord Foulkes of Cumnock (Lab)]

My noble friend deserves the title he got of “Campaigner of the Week” for this campaign. Will the Minister send a message to Andrew McDaniel, head of the New York hedge fund Meadow Partners, which owns Meadow Residential, to get round the table to resolve this problem? Will he also tell him that treating a much-loved local club like this—putting up a six-foot security fence with a notice saying “Trespassers will be prosecuted”—does not help?

[Lord Bourne of Aberystwyth]

My Lords, I note what the noble Lord says. Clearly we are hoping for mediation, so perhaps his mediation skills might be brought to bear when we get there—although possibly the approach might be a little more nuanced. I will just add that the situation in Dulwich is by no means unique. There are many other such situations, and the Minister for Sport is determined to look at this in a holistic way to see what we can do.

[Lord Addington (LD)]

My Lords, many sports clubs, especially those with established grounds beside urban areas, are under threat from development. Will the Government give us not just an idea that this should be taken into account but a structure where, if somebody provides a community asset—that is, exercise and community involvement—there is a structure that guarantees the ground and that its activity will not be lost unless there can be some form of replacement on a like-for-like basis, within striking distance of that community?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord will be aware of the community assets policy, which I think answers some of the points that he has raised. I will make sure that he has a copy of it, showing how it operates. However, I will say once again that the Minister for Sport is looking at the matter. It is partly a question of contractual arrangements—it is not just a planning situation—because clubs sometimes need advice when entering into contractual arrangements with others. I think that that was part of the problem in the Dulwich case. So there are many aspects to this, but we are determined to look at them.

[Lord Faulkner of Worcester (Lab)]

My Lords, does the Minister agree that one of the undesirable effects of the rise in property values, particularly in inner cities, and the introduction of substantial sums of extra money into football at all levels, has been the growth of what one might call less desirable individuals coming in to own and run clubs—and in some cases to close them down, as we have heard this afternoon? Does he feel that the football authorities have sufficient power to implement their fit and proper person test and keep some of these characters out of the game?

[Lord Bourne of Aberystwyth]

The noble Lord raises a very important point in relation to fit and proper persons—and, again, I will make sure that the Minister for Sport is aware of the concerns expressed in this House when looking at this issue. In order to ensure that the House is aware of this, I will simply say that many successful football players of great wealth are helping—I think that Rio Ferdinand is an example in relation to Dulwich. However, the noble Lord makes a valuable point.

[Lord Ouseley (CB)]

My Lords, I am delighted to hear that the Minister for Sport is trying to rescue the situation. My concern in relation to this Question is the effect, over a number of years, of the loss of playing fields that have been sold off by local authorities, having been encouraged to do so by previous Governments, notwithstanding the commitment to replace them with new provision. What evidence is there of the new provision, and what impact is the loss of playing fields having on young people and their health?

[Lord Bourne of Aberystwyth]

The noble Lord is right to raise that issue. He will be aware that Sport England is a statutory consultee where a playing field or sports facility is threatened with closure. The latest statistics show that 1,138 out of 1,200 planning applications in 2015-16 resulted in improved or safeguarded sports provision. I think that that is about 95%. So it is not 100%, but I hope it will give the noble Lord some comfort, because it is a very high percentage.

[Lord Swinfen (Con)]

My Lords, is it acceptable to develop sites with flat surfaces and playing fields on flat roofs? Will my noble friend look into this?

[Lord Bourne of Aberystwyth]

My Lords, I will certainly ensure that that matter is taken to the relevant Minister so that it is looked at.

[Lord Bassam of Brighton (Lab)]

The Minister rightly said that this situation is by no means unique. He will recall that Brighton and Hove Albion Football Club—

[Lord Bassam of Brighton]

I declare an interest as a member of the Brighton and Hove Albion Supporters’ Club, Lords branch. Focus DIY, which acquired the club in the 1990s, went bankrupt, and Brighton and Hove Albion is now in the Premiership. The noble Lord is right to point out that this situation is not unique, but I would like to understand what action the Government intend to take to ensure that vulnerable community-based football clubs such as Dulwich Hamlet do not fall prey to developers such as Meadow Residential in the future. There is a serious issue here that needs to be addressed nationally.

[Lord Bourne of Aberystwyth]

I thank the noble Lord and recognise his role in Brighton and Hove Albion. There are a couple of specific points that I can mention following the debate in the Commons. My honourable friend the Minister for Sport said, first, that she would look at helping clubs with support to produce proper contractual arrangements when they sell their grounds, which has often been an issue. The other relevant matter which I think the noble Lord may be pleased to hear is that she is asking the Football Association to speak directly to supporters about a review of clubs that do not own their own stadiums. That is very relevant in the context of the point that the noble Lord has raised.

Northamptonshire County Council

Lord Bourne of Aberystwyth Excerpts

Tuesday 27th March 2018 Lords Chamber

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, with the leave of the House I will repeat a Statement made in the other place earlier today by my right honourable friend the Secretary of State for Housing, Communities and Local Government, Sajid Javid. The Statement is as follows:

“Mr Speaker, with permission, I wish to make a Statement about the independent inspection report on Northamptonshire County Council. Everyone in this House, regardless of party, appreciates the crucial role that local government plays as the front line of our democracy—delivering vital services on which we all depend, helping to create great places to live and, in doing so, making the most of every penny it receives from hard-pressed taxpayers to secure better outcomes—all of which builds confidence and trust between local authorities and those they serve, which is why the situation in Northamptonshire is of such concern.

Prior to my instigation of the report, there were signs that Northamptonshire’s situation was deteriorating. External auditors at Northamptonshire had lodged adverse value-for-money opinions in audit reports, suggesting that the council was not managing its finances appropriately. The resignation of the former leader in May 2016 also signalled the need for change. As late as last year, the Local Government Association conducted a financial peer review which concluded that there were issues with delivering the ‘Next Generation’ reforms and, again, with mismanagement of its finances. The then chief executive, Paul Blantern, resigned in October 2017.

These reports, along with the concerns raised by district councils in Northamptonshire and by honourable Members of this House with local constituencies, prompted me to act, as I was concerned that there were potentially fundamental issues within the authority. On 9 January, I informed the House that I had concerns regarding the financial management and governance of the council. I therefore decided to exercise my powers under Section 10 of the Local Government Act 1999 to initiate a best-value inspection of the council, and appointed Max Caller, an experienced former chief executive and commissioner, to conduct this and report on whether or not the council was complying with its best value duty.

Mr Caller submitted his report on 15 March, and I placed a copy in the Library of this House so that everyone could see what he had found, and his recommendations. Before I go any further, I thank Mr Caller and his assistant inspector, Julie Parker, for their dedication and focus in conducting such a thorough and prompt review.

When I commissioned the best value inspection, I asked the inspector to consider four things in particular: first, whether the council had the right culture, governance and processes to make robust decisions on resource allocation and to manage its finances effectively; secondly, whether the council allowed adequate scrutiny by councillors; thirdly, whether there were strong processes and the right information available to managers and councillors to underpin service management and spending decisions; and, fourthly, whether the council was organised and structured appropriately to deliver value for money.

I have reflected on the contents of the Caller report. It is balanced, rooted in evidence and very compelling. The inspector has identified multiple apparent failures by Northamptonshire County Council in complying with its best value duty—failures on all counts. While I recognise that councils across the country have faced many challenges in recent years, the inspector is clear that Northamptonshire’s failures are not down to a lack of funding or because it is being treated unfairly or is uniquely disadvantaged compared with other councils.

Mr Caller says in his report:

‘For a number of years, NCC has failed to manage its budget and has not taken effective steps to introduce and maintain budgetary control’.


Furthermore, the complex structure of financial support meant that oversight was difficult and accountability blurred. The report says that Northamptonshire’s ‘Next Generation’ approach, which envisaged outsourcing many of the council’s functions, had no,

‘hard edged business plan or justification to support these proposals … which made it difficult to ensure a line of sight over costs and operational activity’,

and,

‘made it impossible for the council, as a whole, to have any clarity or understanding as to what was going on’.

Similarly, the inspector found that Northamptonshire County Council used capital receipts to support revenue spend without documentary evidence demonstrating compliance with the statutory guidance and direction. Furthermore, until this February, there was no report to full council on the proposed projects and their benefits. He says:

‘Savings targets were imposed without understanding of demand, need or deliverability and it is clear that some Chief Officers did not consider that they were in any way accountable for the delivery of savings that they had promoted’.


On the question of scrutiny, the report says:

‘The council did not respond well, or in many cases even react, to external and internal criticism. Individual councillors appear to have been denied answers to questions that were entirely legitimate to ask and scrutiny arrangements were constrained by what was felt the executive would allow’.


I want to emphasise that the report also indicates that the hardworking staff of Northamptonshire County Council are not at fault and have worked hard to provide quality services. With all this mind, it is clear that I must consider whether further action is necessary to secure compliance with the best value duty. In doing so, I want to reassure the residents of Northamptonshire that essential services will continue to be delivered.

The inspector is clear that:

‘The problems faced by NCC are now so deep and ingrained that it is not possible to promote a recovery plan that could bring the council back to stability and safety in a reasonable timescale’.


He recommends that:

‘A way forward, with a clean sheet, leaving all the history behind, is required’.


I am therefore minded to appoint commissioners to oversee the authority using my powers under Section 15 of the Local Government Act 1999. From day one, I propose that they take direct control over the council’s financial management and overall governance. Getting these basics right must be the first step in stabilising this authority. I also propose giving them reserved powers to act as they see fit across the entirety of the authority’s functions if they consider that they must step in. My officials are writing to the council and district councils today to this effect, and they can make representations on this proposal. I will consider any representations carefully before reaching a final decision.

The Caller report makes a clear recommendation on restructuring, and notes there are a number of options available. So, in addition, I am inviting Northamptonshire County Council and the district and borough councils in the area to submit proposals on restructuring local government. I would like those councils to think about what is right for their community and the people they serve, and to come forward with proposals. This invitation and the letter to Northamptonshire that I mentioned earlier have been published today, and copies placed in the Library of this House.

It is clear to me that any proposals from the councils should seek to meet the criteria for local government restructuring that I have previously shared with the House: that they should improve local government, be based on a credible geography and command a good deal of local support. I will be particularly interested in hearing how the councils have consulted with their communities to ensure that Northamptonshire’s future is truly locally-led.

The findings of Mr Caller’s inspection report on Northamptonshire County Council are extremely serious, which is why this Government are prepared to take decisive action to ensure that local people receive the high-quality services they need and deserve, and to restore faith in local government in Northamptonshire. I commend this Statement to the House”.

--- Later in debate ---

[Baroness Pinnock (LD)]

My Lords, I draw Members’ attention to my registered interests as a vice-president of the Local Government Association and a councillor in the borough of Kirklees in West Yorkshire.

I thank the Minister for repeating the Statement. I share his comments that the failures in the governance of Northamptonshire in no way reflect on the many staff who clearly continue to provide services to the public to the best of their ability. Nor do they reflect on the majority of councillors, who, according to the evidence in the best value inspection report, were denied information and were thus not able to undertake their responsibilities as might have been expected.

As a consequence of the inspection, the Government have decided that commissioners should be appointed to take direct control of the council's financial management. This will undoubtedly result in the commissioners proposing that some of the very difficult cuts to services that many other councils have already made will now be made without proper democratic involvement. That is a terrible indictment of the senior officers and senior members of the council who failed to grasp that, like it or not, cuts in income of the scale experienced by local government inevitably lead to significant cuts in services.

Northamptonshire County Council’s response to cuts in funding was to adopt a full outsourcing and commissioning model. For all the reasons expounded in the inspection report—it makes tragic reading—this failed abysmally. The residents of Northamptonshire have been ill served by some of the senior directors of the council, but it is the residents who will suffer the consequences of the failure to get a grip on constantly reducing budgets and to deal with difficult decisions in a timely manner.

That leads me to comment on the financial pressures that local government is facing. As has been said many times in this House and the other place, local government budgets have been reduced by about 40% across the board, and will have decreased by 50%—by half, in other words—by 2020, in two years’ time. This is at the same time as demand for services for vulnerable older people and vulnerable children is increasing at a significant rate. The Local Government Association estimates a shortfall of billions of pounds by 2020 for local government to deliver the statutory services that it is required to.

However, I want to point out that failure to deal with challenging financial budgets is not confined to local government. Carillion is a good example of what happens in the private sector when budgetary situations are not grasped. Many councils are just about managing, and it seems that some will just about manage for only another 18 months or so. There are statutory services to be provided, and for some this will soon not be possible. This brings me to some questions for the Minister. Does his department really appreciate the difficult financial situation that many councils face? For instance, is there an analysis in his department of those councils that may be on the brink of being unable to fulfil statutory functions? I assume that there is such an analysis; maybe he will be able to tell us what planning has been done to meet that eventuality. I ask this so that other councils are not allowed to fall into the same difficulties that Northamptonshire has done, though for very different reasons.

In the case of Northamptonshire, the Government determined that there would be a reorganisation of the county council and district council model into a unitary model. I hope whichever model is chosen succeeds, because residents in that county deserve it to succeed. However, I doubt that will sort out the problem; as the noble Lord, Lord Kennedy, has said, if the financial situation is not resolved, simply moving geographical pieces for governance around the county will not solve it. Perhaps the Government will be able to spell out in the fair funding review which services they expect local authorities to deliver and which are not to be a priority. Until that is clarified, councils will continue to find their responsibilities and funding availability stretched beyond their ability to fulfil their duties.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord, Lord Kennedy, and the noble Baroness, Lady Pinnock, for their contributions. I will try to deal with the issues that they raise. Both of them used the word “tragic” and I absolutely agree that this is a tragic situation that has arisen in Northamptonshire. I remind them both, particularly the noble Baroness, that it is clear from the Caller report and other investigations that this is not a failure because of finance; it is a failure because of governance. It is clear in the report that that is the case.

In response to questions from the noble Lord, I say that the timetable for the district councils and county councils to respond in relation to the appointment of the commissioner is 12 April. It will then be for the Secretary of State to consider any representations or points made. The Secretary of State would anticipate responding by the end of April and then, if appropriate, appointing commissioners to take on the role, which is clearly the direction that Max Caller and Julie Parker, in their excellent report, would anticipate.

On the timescale for the restructuring, I remind both the noble Lord and the noble Baroness that Max Caller says that restructuring is necessary. It is a recommendation of the report. This is not the Government’s view: it is a recommendation to the Government. We ask the relevant seven district councils and the county council to respond by the end of July. We are open-minded on the different options. It is important that we look at what the councils say, bearing in mind the considerations that apply to any restructuring, as my right honourable friend set out: the proposals should,

“improve local government; be based on a credible geography; and command a good deal of local support”.

My right honourable friend went on to say that the councils should state how they,

“have consulted with their communities”.

That is all absolutely right.

I echo what the noble Baroness said about the people working for Northamptonshire, who have clearly worked incredibly hard to deliver services and continue to do so, and what she said about many councillors finding themselves excluded from decision-making, questioning decisions or having the ability to critique, which is not how the local government service should operate and not how the vast majority of local government behaves.

The noble Baroness referred to financial pressures. Quite separately from this, we recognise that there are challenges, but I am keen to keep impressing the basic principle that this is not a failure because of finance. There is no unique feature of Northamptonshire—that it has been discriminated against or has not had the necessary finance. This is a failure of governance, as the Caller report readily recognises. In saying that, I acknowledge that we are looking at fair funding by 2021. That is an important principle and we will be considering the fair funding formula, but that is separate from this issue. Otherwise, I accept the points made by the noble Lord and the noble Baroness.

[The Earl of Listowel (CB)]

My Lords, I thank the Minister for repeating the Statement and declare my interest as a vice-chair of the Local Government Association. I have listened to this very troubling and sad case, which is probably harming the vulnerable children and elderly most of all by its failings. Can he assure me that there are robust mechanisms in place to support councils which are struggling early on, so that we do not get into these situations? In the education system, there was the Greater Manchester Challenge and the London Challenge, where schools got together and poorer functioning schools were supported by experienced heads to get better outcomes for the struggling schools. Is there such a system in the local government framework, particularly for councillors, who have huge responsibilities but may have no experience of social care or finance before arriving in post? Are there robust systems to ensure that they get the right support at the beginning to be able to give the best?

[Lord Bourne of Aberystwyth]

I thank the noble Earl for those points. First, interventions can and do happen. This is not the first intervention in local government services: there have been others for other reasons—Rotherham, Doncaster, Hull and so on. Naturally, any Government would be loath—that might not be too strong a word, but certainly wary—to intervene because of the importance of local government being just that. Of course, there are checks and balances within the local government system operating properly. There is proper scrutiny and there are proper balances. As I think I said on a previous Statement on Northamptonshire, we have looked carefully to see whether any other local authority is remotely in the same position and satisfied ourselves that there is not, but that is something that we obviously keep under careful scrutiny and review.

I also say—and should have said earlier in response to points made by the noble Lord, Lord Kennedy, in particular—that there will be regular reporting to the Secretary of State by any commissioners who are appointed to ensure that the correct procedures are instituted and proper progress made by those commissioners.

[Lord Porter of Spalding (Con)]

I declare my interest as chairman of the Local Government Association and leader of South Holland District Council. It is obviously regrettable when central government feels the need to dip its toes beyond just splashing about into local government, and it is a shame that there is not a way to avoid external commissioners going in, leaving the sector to be able to regulate this part of the world for ourselves—but clearly, under current legislation, it is not. It is with regret that I support my noble friend’s statement that it is time for the commissioners to go in.

I do not think that we should be leaving all the blame purely with Northamptonshire. Clearly local government in general is facing a very tight financial situation, although Northamptonshire cannot claim to be the worst funded. If it were, it probably would have had a case in saying that it was purely down to central government. But it is not the worst funded, and those that are considerably worse funded than Northamptonshire have not got into that state, so we have to accept that Max Caller’s report to a large extent is correct about the financial mismanagement by senior officers and the lack of political oversight while that was happening.

That said, the solution of sending in commissioners is fine but, on the reorganisation, I struggle to see how a change in structure will assist the financial situation because a restructure costs money in the initial years anyway. I would want some reassurance that the Government were prepared to underwrite any potential restructure costs. My real question is that there appears to be an inconsistency in the letter that has gone out today to council chief executives. It clearly says that a proposal from type B authorities—basically the districts—for some sort of reorganisation within Northamptonshire to at least two unitaries is the model that is being looked at, or would be preferred from the Government’s perspective. But that does not preclude a bid that includes a district council neighbouring Northamptonshire being part of the bid. That is largely because of the current structural arrangements of two councils—one in Northamptonshire and one in, I think, Oxfordshire.

The letter also says specifically that a single county model is ruled out. Does that mean a single county model with one district from a neighbouring borough is not ruled out? It is inconclusive, in the opinions I have had on that letter. If we are expected to advise the sector, it would be handy to have an answer to that question.

[Lord Bourne of Aberystwyth]

My Lords, I thank my noble friend Lord Porter very much for a balanced and temperate observation. I absolutely agree that it is clear from the Caller review that commissioner intervention is appropriate. Central government, under various political parties, has always been wary about interventions, but here it is undoubtedly the right approach and certainly the recommendation. Once again, I remind noble Lords that this is not a matter of finance; it is a matter of management and governance, as was made very clear by the Caller report: silo thinking; lack of team working; lack of challenge; and so on. No doubt, inappropriate financial decisions were made but they were based on an essential failure of governance according to the Caller review.

On the point made by my noble friend Lord Porter in relation to possible restructuring, the department and the Secretary of State are very keen to hear the views of the districts and of the county on that. That is important. It is made very clear in the letter that we want the determined views of the local councils before responding by the end of July. I would encourage councils to regard the fact that they can make recommendations about restructuring, which will be looked at by the department and the Government. Obviously there is time to consider this—if not at leisure, then certainly with some reflection, because I quite agree that it is a very important step to be taken.

House adjourned at 6.55 pm.

Greater Manchester Combined Authority (Amendment) Order 2018

Lord Bourne of Aberystwyth Excerpts

Tuesday 27th March 2018 Lords Chamber

Moved by

[Lord Bourne of Aberystwyth]

That the draft Order and Regulations laid before the House on 5 and 7 February be approved. Considered in Grand Committee on 20 March.

Motions agreed.

Non-Domestic Rating (Rates Retention and Levy and Safety Net) (Amendment) Regulations 2018

Lord Bourne of Aberystwyth Excerpts

Tuesday 27th March 2018 Grand Committee

Moved by

[Lord Bourne of Aberystwyth]

That the Grand Committee do consider the Non-Domestic Rating (Rates Retention and Levy and Safety Net) (Amendment) Regulations 2018.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, these regulations, which are highly technical, make changes to the regulatory framework governing the day-to-day operation of the business rates retention scheme. The amendments in these regulations are necessary to ensure that the regulatory framework properly reflects the impact of the 2017 business rates revaluation, our decision to create new 100% business rates pilots in London and 10 other areas of the country, and changes to the compensation arrangements in enterprise zones.

Before saying something about each of the changes, I remind the Committee that the rates retention scheme was introduced with effect from 1 April 2013. For the first time since 1990, it allows local authorities to keep a percentage of the business rates they collect from local ratepayers and gives them a direct financial interest in maintaining and extending their business rates’ bases.

When the scheme was first set up, local government was able to keep 50% of locally raised business rates, subject only to a redistribution mechanism that requires authorities which have more business rates than their relative needs to pay over some of that income as a so-called tariff, while authorities that have a lower business rates income than their relative needs receive a top-up payment.

In 2017-18, we allowed local authorities in five newly created 100% pilot areas to keep all the local business rates they raised. Additionally, we increased the GLA’s share of business rates from 20% to 37% and, in return, it took on direct responsibility for financing Transport for London’s investment grant from its additional share.

In December last year, we announced that we would create a further 11 100% pilot areas, including in London. In 2018-19, therefore, local authorities in Berkshire, Cornwall, Derbyshire, Devon, Gloucestershire, Greater Manchester, Kent, Leeds City, Lincolnshire, Liverpool, London, Solent, Suffolk, Surrey, West of England and the West Midlands will all keep 100% of the business rates they raise locally. The regulations before the Committee this afternoon will give administrative effect to the 11 new 100% pilots that will come into force on 1 April 2018. They will ensure that the sums paid and received by the pilot authorities over the course of the year reflect the new pilot arrangements.

As well as amending the administrative arrangements of the rates retention scheme to reflect the new 100% pilots, the regulations also make changes to tariffs and top-ups following the revaluation. As I said earlier, tariffs and top-ups are the way in which we redistribute local tax income between richer and poorer authorities under the rates retention scheme. They were originally set in 2013-14 based on the difference between the business rates that authorities were expected to collect in that year and their relative need, as established in that year’s local government finance settlement. Since then, they have been uprated only by inflation.

However, as a result of the business rates revaluation that took effect on 1 April 2017, the amount of business rates that authorities will actually collect in 2017-18 will be very different from what they collected in 2016-17. If, therefore, we were simply to uprate the existing tariffs and top-ups by inflation, as we have done in the past, authorities could find their income from business rates substantially changed, for reasons quite unconnected to their efforts to secure growth. Therefore, when we set the scheme up in 2013, we announced that we would adjust tariffs and top-ups to strip out the impact of revaluations.

In the 2017-18 settlement, we announced adjusted tariffs and top-ups for all authorities, but, as we said at the time, we would revise them in the 2018-19 settlement to reflect updated data. These revisions were duly made in February as part of the local government finance settlement for 2018-19. However, the revised values are also used in the calculation of levy and safety net payments under the rates retention scheme. The changes made by the regulations before the Committee this afternoon ensure that the revised values for tariffs and top-ups in 2017-18 and 2018-19 will be used in levy and safety net calculations. Without these regulations, the calculation of the levy and safety net payments due to or from authorities would be wrong. Authorities that needed a safety net payment would fail to get one, and other authorities might be forced to pay a levy that they could ill afford.

Finally, the regulations make changes to the financing of enterprise zones. Under the rates retention scheme, certain areas have been designated as enterprise zones. In those zones, authorities are entitled to keep all of the growth in business rates income. The growth is used by local enterprise partnerships, or LEPs, to help regenerate the zones. Enterprise zones were first set up in 2013, and there are now more than 200 separate zones in nearly 100 local authorities. As well as keeping all the growth in business rates in an enterprise zone, authorities are also able to give business rates relief to new businesses relocating there, thus further stimulating economic development. Where authorities use their powers to award relief, they can be compensated by central government for the reduction in their income. Compensation is given to local authorities by allowing them to deduct the cost of the relief from the 50% share of business rates that they otherwise pay to central government under the rates retention scheme. Of course, with the advent of 100% business rates pilots, any compensation owed to 100% pilot authorities will be paid via a Section 31 grant because there is no longer a central share from which it can be deducted.

When the first enterprise zones were set up in 2013, authorities were entitled to receive compensation for the relief they gave for a period of five years until 31 March 2018. That period, set out in the rates retention regulations, has not changed since, despite the fact that we have set up new enterprise zones in 2014, 2015, 2016 and 2017. In order to ensure that every enterprise zone is treated on an equal footing, regardless of the date that it came into being, the regulations ensure that authorities can be compensated for up to five years after the enterprise zone came into existence, regardless of whether that was 2013, 2017 or any year in between.

To sum up, the regulations make technical changes to the administration of the business rates retention system to reflect the impact of the revaluation. They allow the new 100% rates retention pilots to operate from 1 April 2018, and they put all enterprise zones on a level playing field. Without the changes, authorities would be unable to receive the income from the business rates retention scheme to which they are entitled. I commend these regulations to the Committee.

[Baroness Pinnock (LD)]

I register my interest as a councillor in the borough of Kirklees, which is part of the Leeds combined authority, rather than Leeds City, for the 100% business rates retention scheme. The people in Kirklees would not be happy to think they were part of Leeds City, so we had better make that clear.

--- Later in debate ---

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I refer the Grand Committee to my relevant interests as a councillor in the London Borough of Lewisham and as a vice-president of the Local Government Association. I should say at the outset that I am happy to support these regulations. As the noble Baroness, Lady Pinnock, has just said, this is a technical document and she made a valid point when she highlighted the formula. I must say that the key she is after would have belonged in the Explanatory Notes. It is strange that we have notes but no explanation of what the letters mean. It cannot be changed now, but perhaps it is something that the department should take back for the future. However, as I say, I support the regulations which are useful and will be helpful.

I hope that the Minister will be able to answer a couple of questions. We will have 10 pilot authorities. How many actually applied for this? I might be wrong, but I think that it was around 24 authorities. What is the department doing in terms of providing feedback to the unsuccessful authorities to explain why they were not selected? If I was a member of an authority which had not been selected, I would certainly like to know why that was the case. There may be all sorts of reasons, but it would be useful to know what is said to those authorities which are not to be part of the scheme.

The noble Baroness also mentioned the fair funding review. I hope that the noble Lord will be able to say a little more about that. Can he confirm whether any councils will see a reduction in their income as a consequence of the fair funding review? Will everyone get a bit more or will they all remain as they are now? It would be useful if he could respond to that.

There is also the question of the business rates appeals. I think that something like 150,000 appeals have been hanging around since 2010. We have to deal with them because at the moment the system is not working. The Valuation Office Agency needs more resources to speed up its work because it would be better for everyone if these issues were resolved as quickly as possible. Some of these appeals now go back almost eight years so they need to be sorted out. Again, I would be grateful if the noble Lord can tell us something about the position.

I am also aware of the grant error set out in a Written Ministerial Statement published on 20 March. There appears to have been an overpayment of £36 million which the Government are not going to claw back this year, but may do so in the next financial year. How did the error come about? I would like to understand what has happened because it is quite a large sum of money. Has provision been made for councils to hand the money back or will the repayment be spread over future years?

With those few points, I am happy to approve the regulations.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Baroness, Lady Pinnock, and the noble Lord, Lord Kennedy, for their contributions and I shall try to deal with the points raised. I am flying solo at the moment so one or two caveats may be entered here and there.

On the technical issue raised by the noble Baroness and echoed by the noble Lord about the nature of some of the schedules with the figures and letters set out in them which make Einstein look rather straightforward, perhaps I may get back to them to try to explain how they work.

I shall take up the point made by the noble Baroness about Leeds City Council. I have checked the schedule where it is referred to simply as “Leeds”, but I very much take the point she made about the fierce local loyalty in Kirklees and I readily understand the point she is making.

I gently disagree with the noble Baroness on fiscal devolution. This is significant fiscal devolution. Obviously, at the end of the day there have to be adjustments, which I think we all support. Without a smoothing mechanism, so that rich authorities contribute towards poorer authorities, the system would break down as being totally unfair. I understand the point that she makes, but I think that this is significant fiscal devolution.

Both the noble Lord and the noble Baroness raised the fair funding review. In a sense, we have twin-track processes, both of which kick in in 2021. Significant work is being done on the fair funding review. I say to the noble Lord, without anticipating precisely what the review will show, which of course I cannot do, that I would be amazed if everywhere got a larger sum of money. That is not how it will work. I would have thought that some will get a lesser sum of money, while others will get more. The essence of it is that it will be fair.

The noble Lord asked how many applicants there were to be pilot authority areas. Twenty-six made an application. We have sought to explain to those authorities that were not chosen that the field was competitive, that there was a lot of interest and how we made the decisions. He then, fairly, raised the issue of appeals. He will know—we were both party to the discussion—that the check, challenge and appeal process that we are now adopting will significantly cut down the time taken for appeals. We are working alongside those that are appealing to cut down the time further. Considerable work needs to be done, but we are progressing that.

Lastly, the noble Lord, again fairly, raised the issue of Section 31 overpayments. We have taken the decision not to claw back the overpayment for the last financial year, so to that extent the authorities affected are all better off by virtue of that, but for the next financial year, 2018-19, we have decided that we are not going to overpay. Those authorities will get the correct amount of money. It is not as if we are clawing it back, as it has not been paid yet, but it will be a lesser amount than we were proposing to pay, because we got the figures wrong in the department. Mea culpa on that—lessons are being learned and there are red faces. As I say, this has resulted in a windfall for those authorities overpaid last year, but we are ensuring that this year we pay the correct amount—some £80 million less than it would have been if the error had not been spotted.

I am grateful to the noble Lord and the noble Baroness for their support. I will ensure that I respond to them on the points that I was unable to deal with, particularly the technical one about the figures and letters in the schedules. As I say, I am grateful for their support and I commend the regulations to the Committee.

Motion agreed.