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As the clause is currently drafted, the Secretary of State can take as much money as he thinks is appropriate to meet expenses in giving directions, and there is also a catch-all of expenses incurred “under this Act”. The Explanatory Notes give no sense of what kind of expenses are expected to be covered by Clause 25. Therefore, my first question is: can the Minister describe
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The Bill is drafted in terms of the Secretary of State demanding what he wants from the Big Lottery Fund. Although I am sure that it would be perfectly lawful for the fund to pay up what the Secretary of State demanded, it cannot be sound financial practice for the Secretary of State to demand sums on an unsubstantiated basis and to expect a body to pay on that basis. The fund should be in a position to check—and, if appropriate, to challenge—what the Secretary of State puts in his demands.
The Bill talks about “expenses”, and I hope the Minister will also clarify that term. In particular, is it expected to cover the apportioned cost of staff time spent working on the directions and other aspects of the Bill? Will it also include some calculations of overheads? I am not sure that those are expenses but they are certainly costs, and I should be grateful for the Minister’s views on whether they will be included. The Minister will know that if apportionments and calculations are required, there are no simple rules that apply, and hence some form of examination to establish the reasonableness of what is being demanded from the Big Lottery Fund seems to be appropriate.
In addition, the Bill is expressed in terms of the Secretary of State demanding not only expenses that he has incurred, but also expenses that he will incur; that is, he will be asking for funding ahead of need, which, as far as I can recall, goes against one of the fundamental principles of handling public money. Of course, this is not public money in a pure sense, but money for which there is public accountability. It must surely be the case that expenditure must be actual spending, not prospective estimates which may prove to be excessive.
Accordingly, Amendment No. 97 says that the Secretary of State has to demonstrate to the fund what he has incurred—not what he will incur—on giving directions and on other matters under this Act. I hope that I have explained the change of emphasis in this clause that I seek to make; namely, not that the Secretary of State does not have expenses that might be taken, but, first, that he should justify them and, secondly, that we should seek clarification from the Minister in this Committee as to what the expenses might be and how they are to be calculated. I beg to move.
Lord Bach: The amendments in this group concern the expenses that the Government and the devolved Administrations will inevitably incur in administering and keeping an oversight of the unclaimed assets scheme. I have been asked what those expenditures will be. They clearly will be the administration costs, including overheads, of directions that may be made to Big and of keeping an eye on Big’s effective use of money. Some Members of the Committee asked exactly what Big does in this enterprise.
As is established practice, the Government intend to reclaim the expenses that they incur. They do so in respect of National Lottery funds. Clearly, if the
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In the way that these things work, it would more properly be for the accounting officer for the relevant department—in this case, the Department for Children, Schools and Families—to assure it that the administrative costs incurred were appropriate as part of its overall duty to make effective use of public funds, and for the accounting officers of the devolved Administrations to do the same in respect of their relevant functions. We contend that the role of the accounting officer is one of the answers to the noble Baroness’s concerns that somehow the Secretary of State will demand expenses that are not valid.
On the scale of costs, which I know is one of the noble Baroness’s concerns, I reassure the Committee that while it is not possible to provide a figure at this stage for the likely costs that will be incurred in relation to the running of the unclaimed assets scheme, we certainly do not expect to incur significant costs in maintaining this oversight of the scheme and accountability for Big’s spending.
For the administration of the distribution of lottery funds, as the Committee may know, the DCMS charges the National Lottery Distribution Fund approximately £250,000 per year, which is less than 0.02 per cent of what is raised for good causes each year. Our estimate is that the cost in relation to overseeing the scheme we are debating in this Committee should be significantly less than that, due to it being a smaller fund.
With regard to spending outside England, as I have already said, the Secretary of State will draw on advice from the devolved Administrations for distribution in Scotland, Wales and Northern Ireland. Although the Secretary of State will have overall oversight, it will be for those Administrations to work with Big in their own countries to ensure that spending is distributed in a manner that meets the targets intended in the direction that each Administration issues to Big and the outcome of the funding programmes that they agree with Big.
Therefore, I hope that, even if only to a small extent, the noble Baroness is now happier with our proposals. I repeat that it will be the duty of the accounting officer for the relevant department to ensure that there is no huge expense claim.
7 pm
Baroness Noakes: Before I decide what to do with my amendment, would the Minister comment on the issue of paying money in advance of expenditure? That is not normal government accounting practice.
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Lord Bach: I can go this far. The Bill follows the same approach as it does to the lottery, whereby payments of costs are made to the consolidated fund. The Secretary of State gets his costs out of money given by Parliament. As to the noble Baroness’s question about the costs that he might incur, the best thing that I can do is to write to her on that subject.
Baroness Noakes: I thank the Minister for his reply. I shall consider carefully what he has said but, at this stage, I think that his answer substantially answers the points that I have made, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 98 to 103 not moved.]
Baroness Noakes moved Amendment No. 104:
The noble Baroness said: What nicer way to end our Grand Committee deliberations than with a debate on transparency.
Amendment No. 104 adds a new subsection to Clause 28, which deals with directions, and it requires directions to be laid before Parliament within seven days of their being given. The amendment does not require any parliamentary approval. Its purpose is merely to ensure that Parliament knows what instructions are being given under the authority of this legislation.
There are, I believe, three direction-making powers in the Bill: under Clause 3, the Treasury can amend the asset threshold for the small building societies and banks scheme; under Clause 5, the Treasury can give directions about a reclaim fund’s objects and articles; and Clause 21 contains one big direction-making power, which is also extended to the other countries. Therefore, in practice, my amendment, which deals only with Parliament, might need some extension to the devolved Administrations.
My main point is that these direction-making powers affect important aspects of the way that the dormant accounts scheme set out in the Bill will work in practice—these are not minor areas; they are important aspects—and therefore there is legitimate parliamentary interest in the contents of the directions. As we have progressed through the Bill, we have noted a number of areas where there should be a legitimate ongoing concern with the way in which the dormant accounts scheme works. I refer not only to the way in which money is collected into it but the way in which it is processed through the reclaim fund and then how it is spent and the directions attached to each of those phases. That is why it will be important to keep Parliament aware of the way that the scheme develops.
If the Minister resists the amendment, can he say in what way such directions would otherwise be published? I cannot find any requirement in the Bill or any equivalent area where we would expect to find the directions.
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I hope that we can end our Grand Committee on a note of agreement. I hope that the Minister will see this need for transparency as obvious and as so little needing of further explanation that he will readily agree with it. I beg to move.
Lord Davies of Oldham: I am bound to succumb to the blandishments of the noble Baroness in saying that I agree with her entirely that the Bill should have appropriate levels of transparency on decision-making powers. However, where I disagree with her—I hope not necessitating a further day in Committee—is that I think the Bill already provides adequate transparency. The most significant direction-making power is in Clause 21, whereby any directions given under the clause must be published in Big’s annual report, which must be laid before Parliament and the devolved Assemblies. That is exactly the same approach that obtains with regard to the National Lottery Act 2006 and I do not think that there has been a strong argument that the lottery and its institutions of distribution have been subject to practices that have not been open to scrutiny.
This is a much smaller scheme, and a very worthy one indeed, which all the Committee support; but it is a much more minor scheme than the lottery. These provisions already work well in the lottery with regard to accountability to Parliament. Schedule 9, paragraph 3(2), requires Clause 21 directions to be published in Big’s annual report. That will be the point of reference for all who are concerned about distribution of money. Because of that provision, the main direction power is open and transparent. The only other direction-making power is in Clause 5, which merely requests the reclaim fund to comply with one or more of its objects or articles of association. We do not see why we need to lay such a direction before Parliament. Where I am fully in agreement with the noble Baroness is that the operation of this fund must be transparent. That is why the provisions that obtain in the Bill are designed to meet that objective.
Lord Newby: I did not intervene earlier in this amendment because I was sure that the Minister, even if he did not agree absolutely with its terms, would say something mildly reassuring. What he has just said is quite unacceptable, however.
If a direction had been given last week, for example, on the assumption that Big does an annual report based on the calendar year, it could presumably be 15 months before the direction saw the light of day. This seems completely unacceptable. If he does not want to bring the matter to Parliament—and I know that the Government have resisted Parliament having anything to do with this scheme—why can the report not at the very least be placed on the website of the relevant department the day that it is sent to Big, so that people know what is being proposed? These directions are not on minor things; the Bill is so vague on how
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Lord Davies of Oldham: I accept the constructive point that the noble Lord, Lord Newby, made about how more immediate communication could be effected, and I shall look at the possibilities on giving effect to that.
Baroness Noakes: The Minister almost redeemed himself with his final offer to look kindly on the points made by the noble Lord, Lord Newby. I invite the Minister to clarify whether Schedule 9, I think he said, relating to the provisions of a National Lottery Act, picks up directions in this Bill. I cannot discover where this Bill requires its directions to be published in anyone’s accounts. The noble Lord, Lord Newby, made the perfectly valid point that in any event the timing of such directions relating to Clause 21 would be inappropriately lacking in timeliness. In relation to Clause 5, we have consistently been told that the reclaim fund will be a private body; yet, here the Government are taking direction powers to interfere in a private body.
I cannot think of anything more important than to tell Parliament when the Government have decided to interfere in a private body. I shall not prolong the Committee, but I would say to the Minister that there are some loose ends in this area of transparency of directives. I was mildly encouraged by his response to the noble Lord, Lord Newby, and I hope that the Minister will undertake to clarify for me—
Lord Davies of Oldham: Perhaps the noble Baroness would allow me to be a little more helpful; I was not referring to a lottery Act, I was referring to paragraph 9(2) of Schedule 3 to this Bill, which requires Clause 21 directions to be published in Big’s annual report. That was the element of accountability that I was seeking to emphasise.
Baroness Noakes: I am grateful to the noble Lord for that clarification. I can now see what he is referring to. In which case, we come back to the point of the noble Lord, Lord Newby, that it could be 15 or 16 months between the giving of a direction and the publication of the annual report. That is not acceptable in parliamentary terms. However, we will return to this at another stage and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Bill reported with an amendment.
- The Committee adjourned at 7.12 pm.
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