Northern England: Opportunity and Productivity

Lord Shipley Excerpts

Thursday 12th January 2017 Lords Chamber

[Lord Shipley (LD)]

My Lords, I thank the noble Baroness, Lady Massey of Darwen, for initiating this debate. I add to her list of places in the north that voted to remain my own city of Newcastle upon Tyne.

I congratulate IPPR North on its incisive report. Its recommendations urging local enterprise partnership resilience audits in the face of Brexit and the creation of a northern Brexit negotiating committee to speak for the north in the absence of the devolved structures now available in London, Scotland, Wales and Northern Ireland are critical. IPPR North is also right to identify the adoption of a place-based approach to industrial strategy, encouraging regional differentiation, co-ordinated investment and devolution as its basis and ensuring that all parts of the north and not just the big cities can grow.

A hard Brexit will damage the north’s economy profoundly, with fewer exports and fewer jobs as we exit the single market and the customs union. The north must keep access to the single market and the customs union. Over half of our exports go to the European Union, and the prospect of those exports queuing up at foreign borders because we have left the customs union is too dreadful to contemplate. Leaving the single market will create tariff barriers, which will result in lower exports.

Mention has been made of the northern powerhouse. The Government were right to create it as a flagship policy but it has to date suffered from being more flag than ship. However, the signs are encouraging, not least in the work of Transport for the North, whose role will inevitably relate not just to investment in transport infrastructure but to the wider economic development of the whole of the north.

I want to suggest to the Minister a six-point plan—which is not exclusive—to boost growth and productivity in the north. If there is no plan, the economy of the north risks being squeezed by the economic strength of London and the south-east in one direction and Scotland in the other, which could well see an economic resurgence if its wish to stay in the EU results in a referendum vote that means it leaves the UK.

Turning to the six points, first, I want to see the introduction of regional targets for the Department for International Trade for foreign direct investment, which is currently assessed only across the UK as a whole. I draw attention to the fact London got one-third of all new jobs from foreign direct investment in 2015-16.

Secondly, the Government should be encouraging the private sector to invest in the north to boost development. As an example, I pay tribute to Legal & General’s investment in Newcastle, including a £65 million investment in the Science Central site. This is good news, but we need more of it.

Thirdly, we need a major boost to our secondary schools, as there has been in London, which now has a much higher achievement rate than the north—and, of course, much higher funding per capita. The CBI demonstrated in its December report that that is a key factor in driving up productivity and therefore wages.

Fourthly, will the Government look at using some of the apprenticeship levy from April to promote employment and higher-level skills development in areas that have done less well since the crash?

Fifthly, the north’s universities need to work even more closely together to promote innovation across the whole of their sub-regions so that more people—not just those in the big cities—can benefit from their job creation.

Sixthly, the north needs a bigger share of the country’s communications investment in both transport infrastructure and digital support for SMEs to enable them to grow faster and export more. Its share has been far too low, as I think the Government now acknowledge.

In conclusion, the north has a huge cultural heritage, which we want to protect and promote. Much of that was forged by the Industrial Revolution. We need a new revolution, one that drives a sense of common purpose across the north to invest more, to make a success of devolution and to bridge the productivity divide. Places that feel left behind need new thinking. I hope the Minister will agree that to leave policy simply in the hands of the Treasury, which thinks only in terms of innovation driving growth, does not help the left-behind places. Those places need intervention to address the barriers of skills, poor connectivity and lack of investment.

Housing and Planning Bill

Lord Shipley Excerpts

Monday 25th April 2016 Lords Chamber

[Lord Shipley (LD)]

My Lords, I shall speak to Amendment 123B and talk specifically about the pilot schemes, but I do share a number of the concerns the noble Lord, Lord Beecham, expressed. I have doubts about what is proposed but, on the assumption that they might go ahead, I will talk in some detail about the nature of the pilots that are being planned. I am grateful to the Royal Town Planning Institute for its advice on this matter. I say to the Minister that I have no intention of dividing the House, but I hope to help inform the Government’s thinking in response to the recent consultation.

Last week we had considerable debate on charges for planning applications relating to full cost recovery and greater flexibility in charging. A number of people said that private providers would be more expensive than planning authorities currently are. Government Amendment 120A reflects some changes since Committee stage and I welcome that movement. We now know that the pilot will be temporary and we know from government Amendment 121 that there must be a review of the pilot within a year of its termination. So, taken together, Amendments 120A and 121 will test the practicality and desirability of competition in the processing of planning applications, but not their determination. I welcome the Minister’s confirming a moment ago that there will be absolutely no role for that in determining planning applications, although on the next group of amendments I would like to say something about the need for a firewall to ensure that there is no connection between processing and determination. We know, too, that there will be a report within 12 months of the last of the pilots ceasing, which will set out the results and conclusions of the review.

If there are to be pilots to test whether more competition would help the planning system, it is in the best interests of good policy-making to test whether more resources alone would help. The problem with the pilot scheme as devised is that after the five years or so, it would be very difficult to work out whether competition had produced what the Government would hope were good results. This would make it very difficult to use it as the basis for rolling out the pilots further.

Amendment 123B seeks to address this issue, as it would pave the way for a parallel pilot scheme alongside the Government’s proposed pilot scheme. This parallel pilot would be designed to grant fee flexibility to local planning authorities in return for cast-iron commitments to reinvest greater income in the planning process. That could include information technology, greater joint working across councils, and the further training of staff towards professional accreditation. There would also be a need for a planning authority to demonstrate improving—or at least continued—high performance year on year.

In chapter 1 of their consultation document published in February, on which consultation closed on 15 April, the Government made some proposals which verge on this one in the context of devolution deals. The Government make particular reference to reforms which would be a fast-track service from the existing local authority for an increased fee, and competition as provided for in the Bill. While the first of these would arguably overlap with my proposal, it is too narrow a definition of reform and would not enable any satisfactory comparison with the competition pilots. For example, the competition pilots will not be limited to offering fast-track services. Therefore, I have concluded that for proper evaluation to take place, the impact of additional tied resources on its own should be tested alongside the impact of competition. Given that the whole initiative is a pilot programme, it seems strange to wish to limit it to one kind of pilot. There should be more than one kind of pilot.

Could the Government use the powers conferred by the Bill to operate a parallel pilot scheme of the kind I have outlined? That would meet a number of the problems and criticisms raised last week on Report, and could produce a more robust outcome for the Government’s proposed pilots. I would be very happy for the Minister simply to take the measure away and think about it. I do not expect an immediate answer because in any case, the Government have to respond to the consultation, which closed only a few days ago. A different kind of pilot based on fee flexibility could be important in helping the Government to achieve the robust pilots they are seeking.

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[Baroness Evans of Bowes Park]

My Lords, I hope I gave a full explanation in my opening remarks of our approach to the DPRRC’s recommendations—where we have accepted and taken on board its comments, as well as those of your Lordships—and why we believe that Amendments 121CA and 135D are impractical. Amendment 121G repeats a provision that we have already laid.

The noble Lord, Lord Beecham, talked about the figures on outsourcing and shared services in the impact assessment. The key point is that, in many services, local authorities have undertaken significant reform and shown significant cost reductions. Some examples are set out in the impact assessment. However, in respect of planning services, authorities have been slow to do such reform, which is why we want to go forward with these pilots.

Amendment 123B in the name of the noble Lord, Lord Shipley, proposes an alternative pilot to test fee flexibility alongside the competition pilot scheme. I cannot accept this amendment because we already have the necessary powers and are already taking forward the proposal with the intention of evaluating its effectiveness. Section 303 of the Town and Country Planning Act 1990 allows us, through regulations, to set different fees for different local planning authorities, although Clause 141 of this Bill will make such an approach easier.

Our recent consultation paper included a proposal to test the provision of greater flexibility in fee setting, on top of our proposals for national increases in fees linked to inflation, where local authorities come forward with ambitious plans for reforms and improved performance. The noble Lord raised concerns that our proposals in the consultation are too narrow. The reference to a fast-track service was one example. We will explore a range of options for fee flexibility with areas and have started to have those conversations in some areas.

[Lord Shipley]

I thank the Minister for her response so far, but I want to be clear that I am talking about a measurable pilot, not one which is simply a set of options which may prove not to be measurable because they have not been set up properly. If a competition pilot is to take place, it has to be measurable; otherwise, the outcomes cannot be measured. Any fee flexibility pilot would also have to be measurable. The powers may be there already for the Government, but this has to be set up in a way that can be measured.

[Baroness Evans of Bowes Park]

Our aim with these pilots is certainly to be able to measure and look at differing effectiveness. As the noble Lord rightly said, the consultation is still out, and we will obviously be coming back with further details, but our intention is certainly to test the effectiveness of the different approaches. Furthermore, recent devolution deals included a commitment to this effect, and discussions are starting with these areas.

I will respond to the points raised by my noble friend Lord True in the next group, but I can say now that we will use regulations to prevent conflicts of interest and maintain ethical and professional standards. Local planning authorities will retain responsibility for deciding the planning application, having received a report with a recommendation from the provider that the planning applicant chose to submit their application to for processing. As I say, I will speak a bit further about this in the next group.

I hope that noble Lords recognise in my opening comments and the government amendments that we have sought to be reasonable, to address key concerns and to implement, in an effective way, the recommendations of the DPRRC. I hope on this basis that noble Lords will not press their amendments.

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[Lord Shipley]

My Lords, I speak in support of the noble Lord, Lord True. I said a number of things in Committee on this group, and Amendment 121E in particular, about the independence of the advice being given, the role of planning officers employed by a council to comment on the report that has been written, and the importance of the general public understanding that independence and due probity is being followed at all points, because the issue of public trust is critical. For the public to have any confidence in the planning system, a robust firewall must be in place so that those writing reports are, and are seen to be, independent of applicants and subject to all the relevant codes of conduct that apply to professional planners.

It is vital that the people whose reports the community’s elected representatives are being asked to trust are people whom the public trust, too, especially if neither the public nor the council members are able to choose them. Local authorities can contract out these services, and some do, but they must nevertheless guarantee that alternative providers are subject to the same quality, accreditation, competencies and code of conduct that would apply in the public sector. Ensuring that independent providers are qualified to work in the public interest is a necessity, and must apply not just longer term but during the pilot period that we discussed under the previous group.

[Lord Beecham]

My Lords, I have a good deal of sympathy with the points of both the noble Lords, Lord True and Lord Shipley. I am concerned how it would be seen by the public generally, but also by those applicants who have paid for a report to be prepared, which may make a recommendation. The decision will certainly be made by the committee. That is more or less the position that operates now in the existing system. Sometimes, council planning officers’ recommendations are not accepted by the committee, and they may help appellants on appeal. However, if you are paying for that advice as an applicant, it creates a different ambience altogether, it seems to me. It makes the whole process rather more confusing and difficult for the applicant, as well as for the local authority. I hope that the noble Baroness will look again at how the process works, because it is fraught with danger for both the authority and public understanding of what is happening.

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[Lord Bridges of Headley]

I understand the point the noble Lord is making, but when we are talking about public authorities’ land that may stretch the entire breadth of the country, the Government believe that it is in our interest to ensure that the Secretary of State takes that decision.

[Lord Shipley]

Before the Minister sits down, I point out that the Government are very critical of builders who hoard land, but are they critical of Whitehall departments that also hoard land? Is there a list, a register, of all the pieces of land the Minister is talking about? If power is to reside with the Secretary of State, the following question must be: how does the Secretary of State know what needs to be done? Is it not better to accept the amendment moved by the noble Lord, Lord True, which gives the responsibility to initiate the procedure to the local authority?

[Lord Bridges of Headley]

I am sorry to say that I disagree with the noble Lord on his final point. We are indeed looking at the land that the Government hold at national level very carefully indeed. As the noble Lord will have seen, Table 1.12 in the Autumn Statement catalogues what each department is being expected to provide in land for housing and land surplus to requirements, which we will be looking to dispose of.

Housing and Planning Bill

Lord Shipley Excerpts

Wednesday 23rd March 2016 Lords Chamber

[Lord Greaves]

My Lords, we now move on to the part of the Bill that is about housing development linked to applications for development control under the 2008 Act for nationally significant infrastructure projects. This series of amendments probes the provisions which will take the housing element of such projects—where they are linked to infrastructure projects—out of the hands of local authorities and allow people to make the application for development consent under the infrastructure system and to include the housing provision within that application.

The purpose of tabling these amendments is to ask some related questions. A very useful briefing note from the Department for Communities and Local Government, called the Housing and Planning Bill: Nationally Significant Infrastructure Projects and Housing, does answer some of the questions I had in my mind when I tabled these amendments. Nevertheless, some questions remain, and one fundamental issue has a big question mark against it.

Amendment 102CA would name the housing projects which are linked with the infrastructure projects “subsidiary”, which seems to me an appropriate word. It is important that they be seen to be subsidiary or ancillary and not a major part—even if they are 30% or 40% of the reason for the development. Housing ought not to be the reason for the development. Infrastructure projects are the reason for the development.

Amendment 102CC, to new subsection (4B) of Section 115 of the Planning Act 2008, states:

“‘Related housing development’ means development which … (a) consists of or includes the construction or extension of one or more”,

new dwellings. I take it that “consists of” is okay—it “consists of” housing or “includes” housing. What else is there? That is the question. I take it that the “what else” is not the infrastructure, but something else. Therefore, why do things other than housing need to be included?

Amendments 102CF and 102CG challenge the geographical reason for allowing people to include housing in an application for development consent. The briefing note on page five sets out clearly that the Government intend that there will be two reasons for allowing housing development. The functional need ought to be allowed. Paragraph 17 states that:

“Where housing is being provided on the basis of a functional need”,

the limit for the number of houses can be up to 500, which seems rather a lot, even for a functional need. Perhaps the Government can tell us under what circumstances an infrastructure development might also require 500 houses. But paragraph 16 states:

“Where housing is being provided on the basis of geographic proximity to an infrastructure project, the maximum amount of permanent housing that could be granted consent”,

is also 500 houses. I do not understand why the Government are going to allow a national infrastructure project to be put forward with up to 500 houses when the only connection between those houses and the project is geographical proximity: either adjacent or, as my Amendment 102CD puts it, “close to”—the briefing note says up to a mile away.

It seems that the planning permission for new housing estates of up to 500 houses—perhaps most are smaller—is being taken out of the hands of local planning authorities just because the estate in question is next to, or within a mile or so of, a new infrastructure project. I cannot understand the logic of this. I can understand why landowners might want to link them together and perhaps fund one out of the other. Five hundred houses, by any standards, is a big new housing development. It ought to be in the hands of the local planning authority. The guidance sets out that the Secretary of State, in making his decision on the application for development consent, will have to take account of the local plan and the national planning policy framework, and whether it is in a national park or ecologically significant, for example. All these things will need to be taken account of. Local planning authorities do that all the time. However, issues such as design, the relationship between the new development and the existing communities, local highways issues, access, or even Section 106 agreements for new bus services ought to be in the hands of the democratically elected local planning authorities, not put into the hands of the Secretary of State.

There are very good reasons why the national infrastructure planning system exists for national infrastructure projects. There are reasons that I can understand for housing being part of the project—when it is directly related to those projects because it is for people who are going to work there—and it is sensible to put in a planning application for development consent. However, I see no reason at all why local authorities should have this decision seized from them by the Secretary of State simply because a project is next to a new national infrastructure project, even if none of the people living in those houses is going to be associated with, connected with or working at the new development. It seems to be a step too far in the centralisation of the local planning functions of local authorities, and yet another move away from localism to centralism. I beg to move.

[Lord Shipley (LD)]

My Lords, my name is associated with Clause 144 stand part, and I agree entirely with what my noble friend Lord Greaves has said. I regard this as a very important issue because it effectively cuts out local authorities from the planning process on a nationally important infrastructure decision. Simply permitting an applicant to go straight to the Secretary of State to secure approval seems to me to be the wrong approach. What my noble friend said helps us to solve the problem.

[Baroness Evans of Bowes Park (Con)]

I am very grateful to the noble Lord for setting out the basis of his amendment. This clause will allow the Secretary of State to grant development consent for housing that is related to a nationally significant infrastructure project. I hope I can reassure noble Lords about the Government’s intentions and the protections that are in place to ensure that this provision is appropriately restricted.

Clause 144 allows consent to be granted for housing where the housing is functionally linked to an infrastructure project—for example, housing needed for employees at the project. It also allows housing to be consented if it is close to the infrastructure. Any housing that is granted consent within the nationally significant infrastructure regime must be secondary to the infrastructure by satisfying the requirements of being appropriately linked by function or location. The clause will not allow projects that are housing-led.

The noble Lord, Lord Greaves, indicated that he felt that responsibility for granting consent for such housing should lie with local authorities, not the Secretary of State. We believe that this would inhibit developers from realising some significant benefits. For example, a key aim of the Planning Act 2008 was to provide for a single consenting regime. This clause will mean that developers do not have to make a further separate application to the local authority for housing as well as their application to the Secretary of State for consent for the infrastructure. We believe that this strikes the right balance between the two.

It is very important that we recognise that the development of infrastructure projects may well bring important new opportunities to develop housing that were not previously available. A new road or a rail project, or improvements to existing projects, can make land available for housing development that might not previously have been suitable. Although there are only a limited number of nationally significant infrastructure projects that seek consent each year—49 projects have been consented since 2010—the clause offers an opportunity to provide a small but important contribution to the provision of new housing.

The Government have ensured that safeguards will be in place so that existing local and national planning policies will not be undermined. For example, as the noble Lord said, we have made clear in draft guidance that the amount of housing that is likely to be consented will be limited to 500 dwellings. As I have said, we believe that that may be appropriate if some infrastructure projects create new opportunities for housing. Existing planning policies set out in the National Planning Policy Framework—for example, those that may limit development in designated areas, and policies set out in local plans—are likely to be important and relevant considerations that will be taken into account by the Secretary of State when decisions are taken.

I hope I can reassure noble Lords that local authorities and interested parties can play a full role in the process leading up to any decision by the Secretary of State under the Planning Act regime for deciding nationally significant infrastructure. In particular, local authorities can produce what are known as local impact reports, which set out the impacts of the development in their area. Such reports are specifically identified as something the Secretary of State must have regard to when taking a decision.

The noble Lord asked why we say “includes housing”. “Includes” means that related development can include local infrastructure. The nationally significant infrastructure planning regime already requires significant local engagement in consultation, as I said. Applicants are required to engage with and consult local communities and local authorities from the outset, and developers will be expected to engage with local authorities on the housing element of their scheme in the same rigorous manner.

I hope that my responses have provided reassurances to the noble Lord, and I ask him to withdraw his amendment.

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[Baroness Young of Old Scone (Lab)]

My Lords, I recognise that it is late in the day to be contributing to this amendment but I have put my name to an amendment in the very last group, so I am simply delaying myself getting home. I want to remind the Committee about the findings of the Select Committee on the Built Environment, on which I have the privilege to sit, and the very worrying evidence that we heard from planning departments across the country about their ability to recruit experienced professional planning staff and about their viability for the future.

I absolutely support the concerns about this proposal, and I think that Amendment 102D is well worth supporting as a safeguard in terms of the moral hazard issue, but I think that we also need to take account of the fact that at the moment there is a real shortage of suitably skilled and experienced planning staff. If we set up alternative economies in a commercial planning capability, we will find that local authorities are rapidly hollowed out in terms of their planning capacity. It is very close to that at the moment. They have next to no specialist planning skills in heritage, environment and other areas. They are finding it difficult to afford planning staff of their own. So in this proposition we need to take account of the viability of planning departments for the future if skilled and experienced staff are likely to be attracted towards a commercial planning capacity in a competitive sense.

We also need to think about whether we are trying to solve the right problem. There is a real issue about the quality and capacity of planning departments across the country. We saw in our work with the Select Committee impressive alternative models. Local authorities gathered together to create more critical mass and to allow themselves to maintain a range of specialist planning officers. These authorities had voluntarily contracted out their planning support to commercial organisations.

Importantly—and here I disagree violently with the noble Lord, Lord Deben, a rare event in my experience—the planning authority was very much in the driving seat. The worry I have about these proposals is that if you are paying a fee to a commercial provider of planning-support services you will expect them to be on your side. They will be professional and I hope that a quality-assurance process will be put in place to ensure that professional standards are maintained.

As the noble Lord, Lord True, said, the reality is that when you are in front of the jury you will have your man arguing your case, not the local authority’s man helping the local authority’s elected officers take a dispassionate look at what the decision in the public interest should be. As I say, I disagree with the noble Lord, Lord Deben. I am a great fan of the planning system, which is one of the last genuinely democratic processes in this country. It is the responsibility of the local authority and the officers who support it to take a decision in the interests of the local community, balancing all the economic, social, environmental and other issues. I fear that if we do not handle this set of changes carefully we will find that we have tipped the balance too far in the direction of the developer.

[Lord Shipley]

My Lords, I agree with the noble Baroness, Lady Young of Old Scone. I have two amendments in about half an hour from now and I am conscious that we have reached a point where virtually all the issues around Clause 145 are being discussed. The noble Baroness has rightly identified that the balance is about to be tipped. I hope that the Minister, in replying to this debate, will answer the question posed by the noble Lord, Lord Beecham: what exactly is the problem that the Government are seeking to solve? Unless the problem is properly defined, the solution can ultimately give rise to a whole set of new problems that have not been forecast.

There is a real issue about being able to dissociate the democratic decision from the designated person who is writing the recommendation. This was put so well by the noble Lord, Lord True, who rightly defined that the process of making a decision is dependent on what the person who writes the recommendation actually says. It is a whole and a continuum. It is not a function separate from making the decision.

A further issue of major concern to me relates to what the noble Lord, Lord Deben, was talking about earlier. It is wrong in principle to privatise public regulatory services. That is now happening. There are issues around cost, as to whether it would be more expensive to go down that route, but the principle of a planning decision in practice being privatised is a major issue about which we must be very careful. A designated person who is writing a recommendation has to be independent and to be seen to be independent.

I have concluded that Clause 145 is now not fit for purpose and should be withdrawn in its entirety. If the Government can explain how they can bring it back at Report better than it now is, meeting the public interest test of independence, we might be willing to look at it—but at the moment I see no evidence base that convinces me that Clause 145 should remain part of the Bill.

[Baroness Evans of Bowes Park]

I thank all noble Lords for their contributions to an extremely interesting debate. Before I respond to the specific amendments, perhaps I can make some broad comments, although I will try to keep them brief.

We all want a planning system that is fit for the 21st century: one that can effectively support the delivery of homes that people need, and one that is efficient, responsive and resilient. To ensure this, there have been calls for greater flexibility in the way that fees are set, provided that any changes are linked directly to the quality of service.

We want to address resourcing concerns, but the answer is not simply to ask developers to pay for all local authority costs that go unchecked. The level of planning fees is one side of the resourcing equation. How planning applications are processed is just as important: continually transforming processes to drive down costs and deliver the most effective service possible.

Currently, local planning authorities have a monopoly on processing applications for planning permission which denies the user choice and does not incentivise service improvement and cost reduction. My noble friend Lord Deben made a strong case for why we need to look at this area. Local authorities can do more to transform their planning departments. Many have, as the noble Baroness, Lady Young, identified. Some have introduced new ways of operating through outsourced and shared service approaches and shown that performance can be improved and costs reduced—but more should be following their lead. We believe that it is incumbent on us to test new ways to improve the planning system. Therefore, we want to use the pilots to test the benefits of introducing competition to processing planning applications.

Clause 145 will give the Secretary of State the power, by regulations, to introduce pilot schemes for competition in the processing of applications for planning permission. Regulations will set out the legal framework and the detailed rules for how the pilot schemes will operate. Clauses 145 to 148 set out the scope of what can and cannot be included in the regulations.

Let me now try to be clear on a number of points. This is about competition for the processing of applications, not the determination of applications. I can assure noble Lords that the democratic determination of planning applications will remain with local planning authorities during the pilots, and that they will not be able to delegate this function to private sector providers. We do not intend to make a report or recommendation from a designated provider to a local planning authority about whether or not the authority should approve the planning application in any way binding, and the authority will be able to reject the recommendation and set out its reasons for doing so. Local authorities will continue to determine planning applications, as they currently do.

Reports from the authority’s officers to a planning committee are not currently binding on the committee. Similarly, reports from a designated provider making a recommendation about how an application should be determined will not be binding. Planning committees or officers taking decisions under delegated authority will be able to reject the recommendation—although, of course, they will need to set out the reason for doing so. The public will be able to comment on planning applications in pilot areas, just as they do now, irrespective of who is processing the application.

We are not forcing local authorities to privatise or outsource their processing service. In pilot areas, the authority will keep its service, but with other providers able to compete with it to process applications in the area. If the authority’s service is the best, why would applicants not still choose it? We are not about to let just anyone become a designated provider. We expect that regulations will require those selected to meet high professional standards and not process applications in which they have an interest.

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[Lord Shipley]

Can the Minister confirm whether an independent council planning officer who is employed by that council will be able to write a critique of the recommendation that has been written by the designated person? This takes up the point raised by the noble Lord, Lord Campbell-Savours. If it is simply a report written by the designated person, how will it be known that it is accurate—and will an independent council planning officer be able to challenge it?

[Baroness Evans of Bowes Park]

The answer to that is yes.

Deregulation Bill

Lord Shipley Excerpts

Wednesday 11th February 2015 Lords Chamber

[Baroness Wilkins (Lab)]

My Lords, I speak in strong support of this amendment, so expertly and comprehensively moved by the noble Lord, Lord Best. When all the evidence points to the dire need for more accessible, future-proofed housing, surely the coalition Government will not insist on additional conditions to be met by local authorities before they can require housebuilders to build homes to disabled-friendly standards.

I apologise to the House for not being able to take part in previous stages of the Bill but I was spending time in hospital, in a spinal injury unit where I met far too many people whose homes had suddenly become inaccessible to them. They had gone out as usual one morning but had an accident, become paralysed and then found that they could never go back to their home again. All the clutter of their daily life was as they had left it; they have to rely on someone else to sort it out. Their families have to start the endless search for an accessible house or flat. They probably have to leave their much loved own home and change the children’s schools, while the patients themselves face long months in hospital long after they are ready for discharge. Is it surprising that relationships break down? Had the lifetime homes standard become universally applied soon after it was developed, probably none of that would be necessary.

Surely the coalition Government will not insist on this short-term reaction to the housing crisis, which will lead to far fewer accessible homes being built. It would mean that they are knowingly legislating to increase the pressure on health and social care budgets at a time when both are in crisis. I urge the Minister to readily give the noble Lord, Lord Best, the reassurances that he seeks.

[Lord Shipley (LD)]

My Lords, I should declare that I am a vice-president of the Local Government Association. I support the amendment, because I think it is true that new subsection (4) in Clause 31 could result in making it harder for a local council to deliver the lifetime homes and wheelchair accessibility policies that we need. I therefore seek the reassurance of the Minister on this matter.

As we have heard, there is currently a very serious shortage of homes that are suitable or can be easily adapted for those with mobility difficulties. The solution to this problem, as we have heard, is to build new homes to a lifetime standard. This matters greatly and will matter even more in the future because people who develop mobility problems usually prefer to stay in their own homes, where any essential adaptions can be undertaken.

This Bill puts lifetime home standards and wheelchair-accessible standards on to a statutory basis, and that is to be welcomed. The problem is that councils will then be required to produce a raft of evidence to prove that there is a need for those lifetime and wheelchair-accessible homes. Definitions of future need might be hard to prove, when common sense tells us that we should build more accessible homes now for an ageing society to prevent serious problems arising in 10 to 20 years’ time.

Until now, local councils have been able to implement very progressive policies, such as requiring all new homes to be built to lifetime home standards or ensuring that a reasonable number of new homes—perhaps 10%—are built with wheelchair access as part of large-scale developments. In supporting new building standards, which improve things, and in believing that we want to encourage local planning authorities to take them up, and while I accept that the creation of new standards could be a significant step forward, I am still very concerned that we might be weakening existing planning powers of councils. I hope, therefore, to hear from the Minister clear confirmation that nothing in the Bill will get in the way of enabling planning authorities to deliver the extra lifetime and accessible homes that we need now and are going to need in the future.

[Baroness Gardner of Parkes (Con)]

My Lords, I strongly support the amendment, and I declare an interest in that I have a daughter who has multiple sclerosis and is a board member of the Habinteg Housing Association. It does marvellous work in providing lifetime homes.

The importance of this has been so stressed by so many people tonight that I do not really need to comment on it. I have other amendments to speak on and noble Lords will be tired of listening to me. However, I strongly support everything that the noble Lord, Lord Best, and other speakers have said and hope the Government will see sense on this.

Economic Leadership for Cities

Lord Shipley Excerpts

Thursday 11th December 2014 Lords Chamber

Moved by

[Lord Shipley]

That this House takes note of the case for enabling economic leadership for cities.

[Lord Shipley (LD)]

My Lords, I am grateful to have this opportunity to debate the case for enabling economic leadership for cities in the UK. I am grateful, too, to those noble Lords who will contribute today from all parts of this House. In particular, we look forward to hearing the maiden speeches of three Members on these Benches, each of whom has had personal experience as a council leader in driving economic growth and whose contribution to our debate will be very valuable.

My purpose today is twofold. First, it is reflective; that is, I want to look back at what the Government have done and what our cities have achieved since 2010. Secondly, it is about looking forward. We are experiencing a sea-change in our understanding of the economic importance of our cities; and by “cities” I mean the conurbation cities belong to—in essence, their travel-to-work areas. We are experiencing a rising self-confidence in our cities as local leaderships grasp the opportunity to do more to generate wealth and jobs and thus to reduce their reliance on London and the south-east. I am much encouraged by this, and, for the avoidance of any doubt, I do not mean for this debate to be exclusive: we should acknowledge the crucial role of shire counties and rural areas in wealth generation and the crucial role of London as a world city whose success means that it represents one-fifth of the UK economy. We may note that London has suffered less in the recession, but our aim should be to raise growth levels in other cities, whose tax revenues are very important to the rest of the UK, as well as London. It is, of course, now hugely expensive to live in London, with the result that there are many reports of young people moving out to other cities in the UK as employment clusters grow there, where the cost of living is cheaper and the quality of life is excellent.

I welcome the interim report by the Independent Commission on Economic Growth and the Future of Public Services in Non-Metropolitan England. It says that a handful of shires are now ready for devolved decision-making about public services and tax. It makes this debate on the economic leadership of cities even more important, because cities depend on rural areas and rural areas depend on cities. They complement each other, and they need to work closely together.

This is not about creating lots of independent city-states; it is about empowerment of our cities within a national framework so that they can grow faster and generate and retain higher tax revenues. It is about bringing local government closer together across boundaries so that it does not operate as geographical silos. Transport, skills and jobs, for example, all transcend an individual council’s boundaries in urban areas. This in turn means that governance structures are needed to which central government can effectively devolve. Such governance structures must have popular support. They need a direct link with voters, they must be inclusive of other political parties, and they must be able to demonstrate a clear capacity to share risk and investment and to deliver better outcomes. Simply dividing up the available cash in Whitehall and posting out cheques will not be enough.

We have learnt a lot since 2010 about what works and what does not. For example, we have learnt that devolution is a process, not an event, and that it is a two-way process. We have learnt that we must learn from doing things and that we cannot wait to move at the speed of the slowest. We have learnt that achieving growth in our cities is so very important because they have been underperforming for far too long and because it is through the tax generated by growth that they will be able to afford the public services that they aspire to. By any method of comparison that we might choose with similar cities across Europe, UK cities underperform. Seven out of our eight core cities in England outside London are below the national average in GDP per capita. Bristol is above, but Birmingham, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield are below. UK cities represent 60% of jobs and output but, interestingly, they account for 73% of highly skilled jobs; they could, however, do much more. Similar second -tier cities in other countries are economically much stronger than ours. One of the problems is that, unlike those European counterparts, powers have been stripped away from local government outside London over recent decades. This has impacted on growth, so it is no surprise that cities outside London have been performing comparatively poorly. For example, in 2010, Manchester had a GDP per head half that of Munich and a fifth lower than that of Marseilles.

Having identified the problem, I want to pay tribute to the leadership on this issue shown by the Deputy Prime Minister and his ministerial colleagues, who in 2011 took the first initiative to strengthen our cities through city deals and who have led those city deals and local growth deals since. The initiative was a vital step because it put cities centre stage. It said that cities were important and it put the onus on them to come up with deliverable proposals that they wanted to implement. It was a subtle but vital change in approach. Defining those cities’ increasing responsibilities has unleashed a rising confidence which can only get stronger.

Cities were prepared for it, of course, because English core cities have been pressing the case for investment and further devolved powers for at least a decade, and had done a lot of the necessary preparatory work. So the Government are committed to devolving power. They appointed a Minister for Cities, introduced city deals and growth deals for local enterprise partnerships, and now devolution deals, of which Greater Manchester is the first, I hope, of many. There were 28 city deals; 95% of the first wave actions are on track or have been completed, while 82% of wave two actions are on track or have been completed. Examples of action taken include growth hubs, innovation centres, earn-back programmes, gainshare schemes for the additional national tax raised, freedoms to borrow against future business rate income and localised youth contracts and apprenticeship schemes. In governance, several combined authorities have been established, with others on the way. Three joint committees have been established and two more are to come shortly. The Glasgow and Clyde Valley cabinet has been established. I turn to the growth deals. The Government have committed £12 billion over six years from 2015-16 to 2020-21 for local growth. In the Autumn Statement, the Chancellor announced £1 billion of funding from that allocation for local enterprise partnerships to be allocated in January.

I conclude from all this that the pace of devolution within England is quickening. The speed and unity behind the announcement about Greater Manchester has been particularly impressive. The context is now one in which there seems to be general agreement that there is a relationship between growth and devolved powers. One has only to read all the reports published by organisations such as Centre for Cities, IPPR North, ResPublica, the City Growth Commission, the Local Government Association and the interim report of the Independent Commission on Economic Growth and the Future of Public Services in Non-Metropolitan England to realise this. But these were all preceded by the visionary report, No Stone Unturned: In Pursuit of Growth by my noble friend Lord Heseltine and by the work of the noble Lord, Lord Adonis, who led the North East Independent Economic Review, which made the case for devolved powers to drive growth and skills and for a combined authority, and talked about the importance of clusters.

There is now a public appetite for devolution within England; opinion polls show that. There may not be any more money for devolution unless it is raised locally, but there can be more effective joined-up delivery of public services, which would save money locally across Whitehall’s 50 spending lines and enable savings to be redirected into investment and growth. Devolution starts with a desire to take on the greater responsibilities that come from having more powers. Just expressing a wish for more powers is not enough. As Jim O’Neill, the chairman of the City Growth Commission, said recently, local leaders aspiring to take on greater responsibilities need to demonstrate that their councils and joint structures have the capacity to take control from Whitehall. That capacity-building is important.

May I make a plea here over words? I hear lots of demands for devolution of powers and freedoms, but it is not just about that; it is also about responsibilities. That is because you can have all the freedoms and powers you like; the real question is what you plan to do with them and how you will measure your success.

We have moved on a long way from the passing of the Localism Act 2011, which gave a power of general competence and helped to create the framework in which city deals, growth deals and devolution deals have been able to take place. It is clear that this is indeed a cross-party initiative at Westminster, as each of the main parties commits itself to the implementation of greater devolution. The crucial point now is this. Cities are thinking about their “functional economic geography” when making economic decisions. They are working across local authority boundaries for the benefit of their area as a whole, and they see growth as a central task of local government rather than just thinking in terms of local government being about provision of services.

One of the consequences of the Scottish referendum is that demands for further devolution within England have increased. We should note, however, that devolution within England is not dependent on what happens over devolution to Scotland; it would be happening anyway, but it may well be speeded up. I would make this further point: there is a huge difference between Scotland, which already had a Parliament, significant devolved powers and debated independence for two years, and English regions and sub-regions, which have no directly elected structures other than through their councils, many fewer devolved powers, and with a few honourable exceptions have not been thinking much about the detail of devolution at the sub-regional level. Defining what is wanted in detail, with clarity in governance and resourcing, is an essential prerequisite to successful devolution, whether it is urban or rural.

One of the indirect benefits of city deals is that they can have the effect of raising the aspirations of an area as a whole. I want to give an example briefly from my own part of the country. In October, some 300 north-east business leaders met in Newcastle to acknowledge the role of those who have helped to build the IT sector in the area into the thriving sector that it has now become, supporting some 32,000 jobs, with a further 2,000, I understand, expected to be added to the sector very shortly. Tech-based entrepreneurship is thriving in the area, fed by active early-stage investment and incubators, dynamic universities and a thriving corporate technology sector. Of course, one of the world’s largest business software firms, Sage, was founded and remains head -quartered in the city. Crucial to this success are the growing indigenous independents now coming together as a cluster to drive the local agenda for skills, collaboration and innovation in IT.

The north-east IT network, Dynamo, has established that the north-east’s current problem in IT is filling vacancies. Some 2,000 jobs were filled this year; for instance, Accenture hired 150 staff and the Government Digital Service expanded to 450 desks locally. Many local firms are now growing beyond 100 staff, some opening offices in other cities to tap new labour markets. Some of the growth is being absorbed by the boomerang Geordies, experienced locals who sought work away but are returning home as globalised markets offer career challenges on their doorstep. It is most encouraging. Indeed, to IT in the north-east we can add clusters in the automotive industry, pharmaceuticals, the process industries and the offshore, subsea and renewables industries. In a recent edition of the Observer, I read an article about Bristol, about its creative edge and about young people moving out of London to Bristol to share in its creative buzz. Clusters seem to be growing in our cities, and that is a very good thing. I conclude that Whitehall must now look increasingly to cities for innovation and growth.

In conclusion, what of the future? The Autumn Statement was very helpful, in particular, in outlining the things that are planned to put the north of England at the centre of growth. What we need now are cities that know what they want. That includes comprehensive city region strategies in transport, housing, skills and land use. They should understand how they will generate more resources locally. Secondly, the Government need to devolve fiscal powers. There is a danger that we will achieve devolution of functions only when we need greater fiscal devolution and three to five years’ funding of central government grant. We should accept and plan for differential devolution and ensure that city regions integrate with each other, particularly in transport.

In their 2011 report, Unlocking Growth in Cities, the Government stated:

“Cities are the engines of economic growth and they will be critical to our economic recovery”.

I hope we can agree. Recently, the City Growth Commission rightly said that sustainable growth and deficit reduction cannot be delivered from the centre. I hope we can agree. The House of Commons Communities and Local Government Committee said this July that cities such as London and the core cities were ready to take greater control over their financing and borrowing powers. Areas to which any fiscal powers were devolved should, it said,

“demonstrably function as an economic unit”.

I hope we can agree.

I conclude that cities need greater control of their funding streams and clear powers and responsibilities. They need fiscal powers and the powers to build up their own resources, and devolving powers to cities should be the start of a much more ambitious process of devolution for the whole of England. I beg to move.

Syria and the Use of Chemical Weapons

Lord Shipley Excerpts

Thursday 29th August 2013 Lords Chamber

[Lord Shipley]

My Lords, history is littered with examples of military interventions that did not work out as planned. We know from experience that things can end up worse than before. Experience also tells us that, if you have no strategy for what happens next, you should avoid intervening. The desire to respond to the atrocities in Syria is entirely understandable, but that response should be based on firm evidence, with international backing for action and with an outcome that can be predicted with a reasonable degree of certainty. The outcome of any intervention must be better, not worse, for the people of Syria. It has to save lives and shorten the civil war, not create a wider conflict in the Middle East. It is difficult to see how a military intervention will achieve any of these objectives.

The Leader of the House said earlier that the Government were right to be cautious, but I am not sure that they have been. I was puzzled earlier this week by the talk of the possible recall of Parliament, since the House of Commons is back next Monday anyway. What was the reason for the rush? We have to conclude that a decision in principle for imminent military action had already been made, without giving time for the UN to report. The timetable for such a course of action is very hard to understand. I hope that my noble friend the Minister will explain the timing when he replies. The UN inspection team needs a few days to complete its work and the Security Council needs the opportunity to consider its findings. What is the point of our involvement with the UN if we are not prepared to listen to its evidence and opinions? The UN Secretary-General said yesterday that we should give peace a chance. He is right. Military strikes will inevitably extend the conflict.

This debate has been constructive and detailed and has demonstrated that the reasons for intervention are unclear. Perhaps the Minister will explain in replying why the Government wish to intervene in the way that they propose. Is it just to punish the Syrian Government? If so, how will the action undertaken be a punishment? Is it to destroy chemical weapons stockpiles? It seems not. Is it to deliver regime change? It seems not. Is it to shorten the civil war? That might be the aim, but the danger is that it will lengthen it and extend its area. Is it simply a humanitarian intervention? If so, how will it prevent a further use of chemical weapons? Without people on the ground, which the Government have rightly ruled out, how will the humanitarian intervention work?

Unless the Government are much clearer about their aims and about the outcome that they want, military action will not help. It will make things worse. We should be influenced by the number of military experts, including noble Lords in this Chamber, who are counselling against intervention. We should be influenced by the fact that a majority of people in the UK are against intervention. We should be influenced by the need for the evidence of complicity by the Syrian Government to be irrefutable; we need better evidence than that it is highly likely that they were complicit at a senior level.

We also need to consider the potential role of the new Government of Iran. A number of speakers in your Lordships’ House today talked about this. Iranians have suffered the use of chemical weapons on their country and could play a much more central diplomatic role in the elimination of chemical weapons in Syria.

There is no consensus in the UK for military intervention and no consensus internationally, either. Yes, we have a duty to protect, but we also have a duty to think about all the possible unintended consequences. Many speakers today said that it was time to engage with Russia, China and Iran at a political and diplomatic level, and I agree absolutely. That is not an argument for doing nothing, but an argument for doing something that can build peace and security in Syria and in the wider Middle East.

Local Audit and Accountability Bill [HL]

Lord Shipley Excerpts

Wednesday 17th July 2013 Lords Chamber

[Lord Shipley]

My Lords, I will add a brief comment about this, because from the perspective of the general public it is a very important issue. I understand that the Secretary of State has made a statement, published in the Local Government Chronicle, that a change will be effected in two years’ time. However, we need to be a bit clearer about what this might mean because of the rights of people to know what statutory notices are being placed that they might be interested in.

As I understand it, newspapers can still be used, which I welcome because newspapers in many parts of the country still have a role in publishing statutory notices. However, that will become a matter for a local council to decide. Let us also note that in the second part of this amendment my noble friend Lord Tope is saying that a local authority has to use a means of publicity that will bring it to the attention of the greatest number of people in the area. I hope no local authority thinks that that means it need not advertise on local lampposts and notice boards. If you are going to get to the greatest number of people, using local lampposts is a very effective means of achieving that.

I think the Secretary of State was quoted as saying that he prefers websites to be used in future. However, I will make three proposals to the Minister that might be thought about when the time comes to issue guidance. It is very easy for information to be lost on websites. There has to be a link to statutory notices from a council’s main page, and the website has to be easy to navigate to get the information off it. I also ask the Government to introduce an automatic postcode search facility so that someone who wants to inquire, as they do on a planning matter, can input a postcode, as they can in most local authorities, and get a straightforward list of current planning applications in that area. I propose that the same thing should happen for statutory notices.

Other than that, the world is changing around us. While I quite like to read statutory notices in newspapers, I understand the need to move with the times as long as the interests of the general public are protected and information is not hidden from them when lampposts, newspapers and the web could all be used in relevant ways as decided by local authorities.

[Lord Beecham]

My Lords, far be it from me to seek to mediate between the coalition parties on this matter, although of course I cannot resist the temptation to do so.

The noble Lord’s proposition is in many ways sensible. Even under the present law, councils certainly have the right to advertise in ways additional to publication in newspapers if they choose. Eventually, no doubt, that will become pretty much par for the course. The Government could facilitate the process by at least reviewing now rather than at some definite point in the future the list of items that have to be publicised, because frankly it is ridiculous. Planning matters are clearly important. However, when it comes to dog control orders or their revocation, the licensing of buskers, charges for street trading licences, abandoned shopping trolleys and charges for public baths and wash-houses, one wonders whether a formal statutory notice of any kind is desired. It is certainly not required, and certainly not in paid publications.

If the Minister were to indicate that the Government will address this matter—it is not that complicated; after all, there are only eight or nine pages of these things to work through—a sensible accommodation could be achieved that still leaves a statutory requirement for publication in newspapers. That should remain as part of a new framework, given that not everyone can look at the website, and there will at least be the opportunity to read a printed version. I hope that that would alleviate some of the concerns of the Local Government Association and, indeed, of the noble Lords who have already spoken. It would not be acceptable for the Government simply to reject the Motion and do nothing about this ridiculous list of notices that have to be published in a paid-for publication at the present time. A gesture from the Government in that respect, other than the normal gesture that one tends to get metaphorically across the Dispatch Box, would be helpful.

Local Audit and Accountability Bill [HL]

Lord Shipley Excerpts

Monday 15th July 2013 Lords Chamber

The scandals of the past few weeks are regrettably unlikely to be the last such abuses in the public sector and in its relationship with the private sector. These are things that I hope Ministers will consider. In future, taxpayers and voters will wonder why, when Ministers had the opportunity to improve the transparency of these relationships, they refused to do so. Therefore, I urge Ministers to reconsider their position and get on the side of transparency. I fear they will come to regret it if they do not.

[Lord Shipley]

My Lords, I remind the House of my vice-presidency of the Local Government Association. I was unable to discuss this matter when it was raised by the noble Lord, Lord Wills, in Committee, but he is making a very powerful case. I hope Ministers will be able to respond in a way that meets the issues that he has so rightly raised.

It is clear in Amendment 18 that a private company that is contracted, let us say, to run a refuse collection service or to run a leisure centre will appoint its own auditors to carry out an audit of the service that it undertakes. However, I do not think that that will prove sufficient. The public interest requires, where public money is being spent on a service, that the auditor on behalf of the public sector should have access to information that lies with the body that is providing the service through a contract. This appears to be an attempt to prevent a local government auditor having access to information that would assist the undertaking of that audit because a service has been provided by a private sector company. That does not stand the test of public accountability.

The noble Lord, Lord Wills, has got it right with Amendment 18. It is reasonable to say:

“A local auditor has a right of access at all reasonable times to audit documents from private companies that the local authority have contracted services to during the last financial year”,

and it is reasonable to say:

“Local auditors only have a right of access to audit documents from private companies … that relate to the service provided to the local authority by that company”.

In both respects, that is a reasonable requirement for a local auditor to expect. The public interest is best served by the auditor having those powers because this is about contract compliance in financial matters and service delivery. It is a basic requirement if an audit is to be undertaken successfully. How else can the general public have confidence that public money is being efficiently and properly spent on their behalf? I hope that we will hear from the Minister something that will convince us that Amendment 18 is not necessary.

On Amendment 23, there should be no diminution in the rights under the Freedom of Information Act. When it comes to transparency, particularly in view of the matters that have occurred recently, of which the noble Lord, Lord Wills, reminded us, your Lordships’ House has a duty to ensure that transparency in public expenditure and the delivery of the public interest actually happen. I hope that the Minister can give us the assurance that the noble Lord, Lord Wills, is seeking.

[Lord Palmer of Childs Hill]

My Lords, this is a very interesting amendment. I just wanted to add one other perspective. Any local authority worth its salt, particularly in this time of outsourcing, when so much is being outsourced to outside companies and bodies, will insist—as I have always insisted in my own local authority—that it has a right within the contract with the outside contractor to be able to audit the documents of the outside contractor. The place to do all the things that my noble friend has suggested is very often within the contract between the local authority and the contractor.

How that works in practice is that the local authority and its internal auditors need to see what the audit processes are within that outside contractor. The idea that the auditor of the local authority will go in on a normal basis and delve into the detailed books and records of the outside contractor is probably stretching the imagination a bit. The trouble with audits—this is where the noble Lord, Lord Wills, really hits the nail on the head—is that they are, in general, historical and you are looking at what went wrong. The noble Lord, Lord Wills, gave two good examples of what went wrong. The question to the noble Lord, Lord Wills, is: if the Government or the local authority had the ability to go in and audit the sort of companies and organisations the noble Lord described, would they have found these particular problems at that stage?

The noble Lord, Lord Wills, is on to a very important point. But I believe—as I hope that my noble friend the Minister will tell your Lordships’ House—that those protections of being able to audit should be more properly contained within the contract between the local authority and the outside body to which it is contracting.

--- Later in debate ---

[Lord Beecham]

My Lords, this amendment refers to the Government’s proposal—which, again, was not subjected to scrutiny by the draft Bill committee—to introduce, effectively, an element of retrospection into the question of whether a referendum should be held. The Bill affects councils that have set council taxes for 2013-14 that would have been excessive if the clause becomes law, by virtue of the change that the Government are imposing in relation to levies by other organisations. Fortunately, it turns out that only a small number of authorities would be affected by the Government’s proposals. Those authorities are Wandsworth—an authority well known to the noble Baroness and other noble Lords—Bolton, Bury, Manchester, Oldham, Rochdale, Stockport and Tameside. There is clearly a clutch around the Greater Manchester area, which presumably relates to some joint organisation in that area which collects a levy. Why Wandsworth should be affected, I really cannot say, although that does not really matter.

In Committee, the Minister indicated that councils had been notified by, I think, 31 January, that this might happen. However, that is a very late stage in the budget-making process, and it would have been very difficult at that stage to have reduced their council tax to the level which, if the Government were to apply the new rules, would have been operative. I repeat that the problem is not about the council’s own budget, it is about the levy imposed by other organisations. Had it been a precepting authority, the precepting authority itself could have had to call and finance a referendum on its own budget.

Many of us are extremely unhappy about the whole concept of these compulsory referendums, which of course do not apply when the Government increase taxes, with a considerably greater effect on the household budget than a corresponding increase in council tax. A 2% VAT increase takes a lot more out of people’s pockets than a 2%, or even slightly higher, council tax increase. Be that as it may, the effect is curiously different between a levying body and a precepting body; a levying body simply passes the cost on. The total amount of money is not enormous and would seem to amount to some £7.3 million. If the councils had been able to reduce their council tax to match the levy that they have had to impose, that would have been the cost to them, to be taken out of services. Nevertheless, it is a significant encroachment and, of course, if that were now to trigger a referendum—because the referendum limit becomes lower in future and councils may feel that they have to go for one—the cost of that, across these authorities, is likely to be pretty much the amount of the total levy across all those authorities. It is a bizarre situation. Given that it is now clear that it applies only to a very small number of authorities, in one particular cluster—in what, by the look of it, must be the special circumstances of Greater Manchester—I hope that the Government will reconsider this matter.

I suppose the Government do not have to apply the provisions of the Bill. If they do not want to amend the Bill and they want to reserve the power, so be it, but I strongly urge the Minister to think again about imposing this. It is wrong in principle, and it is an unnecessary reaction to what turns out in any event to have been a pretty small problem in terms of the number of authorities and the cash affected. It would be a statesmanlike move on the part of the Government to accept that perhaps, in the circumstances, they rather overreacted, fearing worse than has actually transpired, and to indicate that at the very least they would reconsider whether to proceed with the implementation of the clause, if they insist on its standing part of the Bill. I beg to move.

[Lord Shipley]

My Lords, I speak in support of Amendment 43, and will be brief. I agree with the noble Lord, Lord Beecham. I think it is bad policy to backdate the definition of an excessive council tax rise so that it includes a levy from April 2013. I understand that in January this year letters were sent out to local authorities suggesting that the Government might take this course of action. I will say two things about that. The first is that it is simply not enough notice. Council tax-setting takes much longer than just a few weeks. There is a requirement that council tax is effectively set by the beginning of March, so that bills can be sent out. In my view, given the lengthy periods of consultation that local authorities are required to undertake, a period of six months would have been more reasonable.

My second reason for objecting to the Bill as it stands is that one should have respect for the law at the time at which the law is applied. I believe that councils and levying authorities abided by the law at the time. As the noble Lord, Lord Beecham, quite rightly pointed out, it is a comparatively small problem. Retrospective change, whether or not there was a warning, seems to me to be wrong in principle, and should therefore be resisted. The noble Lord, Lord Beecham, said that he felt that the Government were overreacting. I concur with that, because I believe that it is an overreaction to backdate in the way the Government propose.

[The Earl of Lytton]

My Lords, since my name is to Amendment 43, I would like to voice my support for the point that has just been made, and was also made by the noble Lord, Lord Beecham, about the undesirability of retrospection. Notwithstanding the comments made by the Minister at a previous stage of the Bill, there is no question in my mind that Clause 39(15) and (16) are, beyond peradventure, retroactive in their effects. Apart from the self-evident difficulties that that will create within the continuum of local government finance, one supposes that there must be some reason why this has been put in the Bill. I would like to inquire what that reason is, because to date we seem to have had reassurance that there is no intention that this should be retrospective. I do not wish to work out how many angels dance on the head of a pin between retrospection and retroactivity, but I prefer the term “retroactive”.

It seems to me that this is almost calculatedly destabilising, and I cannot believe that that was really the intention. It seems to me that there is a necessity for some further words of qualification, so that the clause is targeted at whichever particular issue needs it, and it is not capable of any sort of generic destabilisation of previous years of local government finance settled business, or what should be settled business. I hope the noble Baroness will be able to give an explanation.

Georgia: Public Services

Lord Shipley Excerpts

Monday 16th July 2012 Lords Chamber

[Lord Shipley]

My Lords, does the Minister agree that the £4 billion new investment programme announced today for our rail network needs to be accompanied by a more streamlined planning system and that following the abolition of the Infrastructure Planning Commission, the Secretary of State has become the one-stop shop for major projects? Will the noble Lord confirm that the planning process will be better as a consequence?

[Lord Wallace of Saltaire]

My Lords, that is a little wide of the Question. However, I did book my train tickets for the next two weekends from London to Saltaire online this morning so I am moving in the right direction in using digital means. In terms of planning, all I have done in respect of railways this morning is to check exactly what the Castlefield corridor, part of the new northern hub, is.

Voluntary Sector and Social Enterprise

Lord Shipley Excerpts

Thursday 21st June 2012 Lords Chamber

[Lord Shipley]

My Lords, I, too, express my thanks to my noble friend Lady Scott for initiating this important debate. The coalition agreement pledged to support the creation and expansion of social enterprises, mutuals, co-operatives and charities in public service delivery, and I am delighted that the Government are delivering on this commitment.

It is important for us to understand the scale of the third sector. In my home city of Newcastle upon Tyne, with a population of 290,000, there are 2,300 voluntary and community groups. One-third—some 800—are registered charities. These large numbers confirm the potential of the sector and, as importantly, the demand for their services. Some organisations are big with lots of contracts and experienced staff; others are of medium size, and tend to be more dependent on grant aid; but the largest number are small organisations with low income levels, often working in neighbourhoods.

As the Government are issuing more work through contracts, the ability and capacity to bid has become more important, and this is where the big and experienced organisations have an advantage. The consequence is that larger organisations that cover the whole country are stepping in. These companies can afford to bid and lose, promote loss leaders and use other income streams to repay loan finance.

What steps can the Government take to enable smaller community groups to compete? The best-value statutory guidance published last autumn, together with recent legislation on social value, requires that consideration be given not only to economic value but also to environmental and social value. This will maximise the additional benefit created beyond the simple provision of the service. As has been mentioned, the social enterprise sector has long campaigned for public sector procurement to take account of social value. This legislation should therefore prove important in enabling the sector to compete successfully for public sector contracts. The big challenge now is to make that happen and to ensure that social value becomes a key component of commissioning. That will require that social enterprises, local government, the voluntary and community sector and central government raise awareness and share good practice. I have been particularly impressed, in the north-east, by the social enterprise framework that has been developed and supported by all the social enterprises in the region. Good leadership is emerging.

As for growth and development, Pricewaterhouse Coopers is offering mentoring support from senior staff, and Teesside University has appointed a social entrepreneur-in-residence. Northumbria Water and the CBI are also undertaking work to bring more social enterprise into the supply chains of big companies. On funding and access to finance, the Northern Rock Foundation is leading a piece of work on access to finance for the sector and has already identified investment readiness as a barrier to growth. Business support seems patchy at best, with enterprise agencies generally not having expertise in this area.

Real businesses show what can be done. In County Durham, a social enterprise is designing and manufacturing collections of home and outdoor-living products. The first collection has been designed in conjunction with Durham prison by two designers-in-residence at Northumbria University. The aims are to change public perception of the quality and style of products produced in prison and to build opportunities for offenders, both in custody and back in the community, to gain employment.

What can the Government do more of and what can local authorities do, too? The Government can help to grow social investment by ensuring that social investment tax reliefs are as attractive as mainstream investment schemes. They can learn from the experience of the Work Programme, launched in late 2010. Nationally, it was expected that the voluntary and community sector would get around a third of the contracts but they got only 20%. The reasons seem to relate to the complexity of contracting and the potential for delayed funding. The Government can make sure that their intention—integral to the NHS reforms—that social enterprise and voluntary organisations could offer bespoke services in their local areas is delivered.

We have heard reference in this debate to the VAT issue, which is a matter of serious concern. I give a further example. I understand that if one housing association provides shared services to another, VAT becomes chargeable on that transaction. Maybe the Government will take the VAT issue seriously.

Local government and councils must ensure that cuts to voluntary sector organisations are not disproportionate compared with those that the council itself faces. It is right that councils can be challenged if they are. Councils should not follow EU procurement procedures when they are not required to do so. They should not use formal contracting when commissioning would be satisfactory or go out for retendering for just one year of support, doing so only weeks before a contract is due to start. Councils need to help upskill the sector with capacity-building teams, by helping them with IT, office space and collaborative budgeting, and by assisting transition where it is needed.

Finally, there is enormous potential for the voluntary sector and social enterprise to deliver growth. That potential should not be underestimated by the Government. I hope they will give it due consideration.