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I, too, am pleased that the Minister has listened to the Delegated Powers and Regulatory Reform Committee’s concern over the LBRO’s ability to direct one or more local authorities into compliance. However, while the Minister might attempt to persuade us that there is no longer a problem with the LBRO issuing a directive if there is now only a single local government recipient—by arguing that such employment of a directive falls into the traditional remit of the situation of last resort when the Secretary of State is forced to take control of an errant body and bring it back into compliance according to the will of Parliament—I argue in support of my noble friend Lord Eccles that the amendment does little to change the Secretary of State’s capabilities. In fact, the Secretary of State can realise exactly what the original clause in the Bill allowed him to do, only now he must limit himself to issuing a given direction, serially, and not in one fell swoop. I hope that the Minister will assure us that this will not happen.
4.15 pm
Lord Bach: I am grateful to Members of the Committee for discussing these important amendments. I will do my best to respond, first, to the noble Viscount, Lord Eccles. Our amendment fully implements the recommendations of the Delegated Powers and Regulatory Reform Committee on this point. It was concerned that,
- “directions under clause 7 should (if they will affect more than a single authority) be contained in an instrument subject to the negative procedure”.
On the noble Viscount’s question about the LBRO giving directions to local authorities sequentially, one at a time, effectively circumventing this amendment, if that were the case, the LBRO would certainly be acting against the Government’s intentions in laying our amendments. Anticipating Clauses 15 and 16, were the LBRO to act in this way, the Government would certainly consider using their powers of direction to stop it doing so. But the LBRO needs the discretion to take administrative decisions on particular authorities if such issues arise, and the amended provision allows for this.
The noble and learned Lord, Lord Lyell, asked whether Amendment No. 33 made a difference to the mandatory position of Clause 7. I am sure that I disappoint him by saying that it does not: it is still a direction clause rather than a guidance clause—the “have regard to”. When we are discussing whether Clause 7 should stand part of the Bill, I will explain why we—and not just us; there are some perhaps surprising allies on this—felt that there had to be a sort of backstop compulsory element in case this did not work.
Directions would require that local authorities comply with them. I hope we are satisfying the Delegated Powers and Regulatory Reform Committee in agreeing that this was not suitable for ministerial diktat but needed to go through an order under the negative procedure. In other words, Parliament would have a role before such a direction could be issued. I hope that that answers the noble Viscount’s question to some extent, and hope to do better when we talk about whether Clause 7 should stand part.
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I am grateful for what the noble Baroness, Lady Wilcox, said. If she will be patient—and I know that she is a very patient woman—she will see my noble friend Lord Jones very shortly.
Viscount Eccles: We have language like “backstop” and “compulsory”, and a letter the noble Lord, Lord Jones, wrote to me in December, after Second Reading, contained the words “reserved power”. We are seeking some enlightenment. The only thing the Minister said was “administrative purposes”. Administrative purposes come every day. What is this power intended to be kept for? If local authorities thought that it was likely to be frequently used, they would simply sit on their hands and say, “We had better wait until we are told”.
Lord Bach: Let me try to do a bit better than before, and I will move forward a bit. The point of Clause 7 is as follows. We understand the concerns relating to it. It allows the LBRO to give directions to one or more local authorities to comply with guidance that it, or another body, such as a national regulator, has issued. The power to direct is intended as a backstop power that might be used where, for example, one or more local authorities persistently acts with disregard for a particular piece of guidance and that disregard is, frankly, detrimental to business or the public or, as could often happen, both.
It is not intended that the LBRO will be directing local authorities as a matter of routine, and its use of this power is subject to important controls. Let me set those out. It may only use the power to direct a local authority: first, with the consent of the Secretary of State, or Welsh Ministers where applicable; secondly, after consultation with any relevant regulator; and, thirdly, after consultation with such other persons as the LBRO considers appropriate. We believe that that will include local authorities, LACORS and professional bodies such as the Trading Standards Institute and the Chartered Institute of Environmental Health.
The Committee will know that the Government have accepted the recommendation that that should be subject to a statutory instrument process where directions apply to more than one local authority.
Our view is that these provisions are vital in enabling the LBRO to achieve its objective and that sufficient safeguards are in place—I know that this is what the noble Viscount will be looking for—to ensure that the LBRO uses its power to direct compliance with guidance in a responsible manner.
The Government recognise that there are legitimate anxieties about the use of powers of direction by public bodies at the centre in the context of local democracy. I suspect that that is what the noble and learned Lord, Lord Lyell, and the noble Viscount, Lord Eccles, are getting at in their questions. It is easy to caricature this debate as one of central versus local government, but the LBRO needs to be able to address the particular issues facing regulatory services which are, frankly, of critical national importance but, perhaps too often, although certainly not always, have an extremely low priority for local authorities in practice.
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When we were discussing the composition of the LBRO board early on Monday afternoon, I talked about the range of stakeholders potentially involved. I know that I am taking up the Committee’s time, but this is an important group, so it may be helpful to review its attitude to the question under discussion.
Our consultation produced an overwhelming view from business that the LBRO would need significant powers of compulsion beyond those of merely issuing guidance. Perhaps that is not very surprising. But business is not alone in that view; many of those who understand the sector well, and have its best interests at heart, take the view that a small, strategic body with significant powers is critical to the future success of our local regulatory services.
I refer the Committee to the briefing on the Bill provided by the National Consumer Council, which has expressed its support for the LBRO’s power to direct, urged the Government to ensure that the LBRO is provided with sufficient discretion to use the power effectively, and stated that,
- “LBRO cannot secure consistency in practice if Local Authority Regulators are free to chose to ignore its guidance”.
There is also briefing from the Trading Standards Institute, which believes that a power to make guidance compulsory—precisely what we have drafted—will be necessary in some cases.
It is right that where legislation seeks to give a body this sort of direction power it should be explained as fully as it can be; but I pray in aid the support of experts in this field, not least people involved in local government, who think that this cannot work unless there is some backstop power of direction. I hope that I have gone some way to answering the questions that have been raised.
On Question, amendment agreed to.
Lord Hodgson of Astley Abbotts moved Amendment No. 34:
Clause 7, page 4, line 32, leave out “in such manner as it considers appropriate” and insert “in such manner as to ensure that those who are, or may be, affected are informed”
The noble Lord said: This takes us a stage further on the topic we have just discussed—enforcement, as opposed to guidance. We move from “jaw-jaw” in Clause 6 to “war-war” in Clause 7. I wonder whether under Clause 7 the need for the LBRO to publish should be drafted only as,
These are significant and important matters, which will now be enforced. Without any pride of ownership I suggest replacing that phrase with the words,
Some explanation from the Minister would be helpful as to why, when we are talking about enforcement, we have such weak publication requirements as those envisaged by Clause 7(6). I beg to move.
Baroness Hamwee: I will speak to the Question whether Clause 7 should stand part of the Bill, which is grouped with the amendment, with no great expectation that the Government will accept it. We
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It is important that we address what is, in some ways, at the heart of the matter. We will come to other relevant clauses, but this is about local democracy, the autonomy of each local authority and, somewhere else in the forest, the need to ensure proper regulation. My objection is, of course, to the power of direction. I have heard so much over the years about local authorities’ freedoms and flexibilities and yet, too often, we come to a point where it is freedom “so far but no further”. There may be a direction to a recalcitrant individual authority or to all local authorities. Perhaps the Minister can tell us whether the requirement in subsection (4) that the LBRO consult before giving a direction will extend from the individual authority to all local authorities. This follows our debate on an earlier clause. At the moment the consultation is with “such other persons”, other than the relevant regulator, “as LBRO considers appropriate”.
Either way, having given guidance, if the LBRO is then faced with the question of whether it should give a direction, I would say that it has pretty much failed because its guidance has not taken everyone along with it, and that is the style that we are being encouraged to assume will be adopted. It will also have corrupted the English language in the process, because while a direction about guidance is not a contradiction in terms, perhaps it should be.
Under Clause 6, local authorities must have “regard” to guidance. Every local authority will have a published enforcement policy, it will be required to comply with the statutory regulator’s compliance code, and the manner in which functions should be conducted is expected to be clear, proportionate and transparent. If a local authority does not have due regard—which properly allows for rejection; due regard cannot mean rolling over and saying yes to everything—to guidance, there are legal appeal mechanisms, a corporate complaints procedure and the local government ombudsman. All of this has been pointed out by the Local Authorities Coordinators of Regulatory Services in its very good briefing.
I would like to use this opportunity to apologise to LACORS because on Monday I indicated that I had not had a briefing from the LGA. I thought that when the noble Baroness, Lady Turner, referred to the LGA briefing it was a separate document, but it was the one we have had from LACORS with the LGA. It was not tardy at all, as I might have implied, so I apologise for that.
The main point is whether a power of direction, that heavy hand of “war-war”, should remain.
4.30 pm
Lord Borrie: I notice that the noble Baroness, Lady Hamwee, has referred to the briefing from LACORS because of her particular point that the Local
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Local authorities are already required to have regard to LBRO guidance. In thinking that Clause 6 is unnecessary, surely the LGA is thinking of the generality. Indeed, as my noble friend the Minister indicated a short while ago, the LBRO is not going to jump in just because of a difference of view between them as to whether the guidance issued should be followed.
Enforcement is completely unnecessary if on all occasions every local authority up and down the country complies with what the LBRO says is significant and important. But what if a wayward local authority persistently takes no notice of the guidance? It makes no sense for the LBRO to be given no provision in statute to deal with an exceptional case. Statutes have to deal with the exceptional case as well as ordinary circumstances, and let us not forget the safeguards. There has to be ministerial consent, or the consent of Welsh Ministers, and Clause 7(4) provides that:
So safeguards are built in. There is no intention that the new body should rampage over local authorities. However, if it has given guidance, and it is clear that that is not being taken notice of by a particular local authority, especially persistently, surely there has to be a back-up power, which is what Clause 7 is.
Viscount Eccles: I wish that I were comforted by the persuasive arguments of the noble Lord, Lord Borrie, but I am not. It is bold to assert that if one makes provisions in legislation of the kind in Clause 7, nobody will use them in an untoward way in the future.
My noble friend Lord Hodgson spoke of the difference between talking and going to war. I remind the Committee that if one goes to war, one has to have a pretty good reason to believe that one would win. I cannot think that any single local authority would rate its chances very highly. It seems that all the leverage is on the side of central government.
The Minister said that the amendments give Parliament the right to pass a negative resolution to stop directions being given to more than one authority. Nevertheless, another sentence in the report of the Delegated Powers and Regulatory Reform Committee states:
“We consider that the Minister should provide a list of the guidance to which Clause 7(1)(b) refers”.
As the noble Baroness said, there is something called “advice” and there is something called “guidance”, which is written. Some of my questions on the previous amendment sought more information on the level of certainty of the guidance at which somebody, in the Secretary of State’s office, because of Clause
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I apologise for going on at length. It has been claimed that support exists. I do not know whether Members of the Committee have read a famous old book by a chap called Dr Eric Berne, called Games People Play. There is a famous game in it called “So you made me do it”. When government pray in aid stakeholders and supporters, and list trading standards, institutes and all the rest, it is moving very close to a game of “So you made me do it”.
The power for the LBRO to make directions in Clause 7(1) as amended today by Amendment No. 33, which will introduce subsection (3A), still raises two major issues. Before I go into them, I point out that the clause has a contradictory title: Guidance to local authorities: enforcement. I have always been brought up to believe that when Daddy or Grandaddy gave me guidance, they were not intending to enforce it, and I was hoping to find that they had no power to do so.
Further, I can find nothing in the Rogers report, which was cited by the Minister on Monday. It is 187 pages long and, on first reading, looks like a most diligent and excellent report. I think that a huge amount of work has gone into it. I find nothing in its recommendations which goes beyond a request that the Government agree the proposed six priorities, which are set out—the Government had asked for five; Rogers came up with six—and that local authorities, having been given the approval, which will assist them at all times but particularly in times of straitened resources, get on with the job, and that the LBRO be the guardian and monitor of best practice. It is clear that Rogers is fully in support of the LBRO being the guardian and monitor of best practice; he says nothing about enforcement by the LBRO upon local authorities. Nor is there good evidence that enforcement upon local authorities was part of Hampton, still less of Macrory. They were all looking for enlightened, continuous improvement in the process of regulation by consent.
The first big issue in Clause 7 is that it gives the LBRO, a non-departmental public body, the power to make guidance mandatory by direction, and a direction compels compliance. I have had some correspondence with the department, as the Minister will know, and I believe that this is an unprecedented use of the power to direct. If there is a precedent, will the Minister provide the Committee with it? The main reason I believe it to be unprecedented is its indirect nature and the number of parties involved. I cannot find an instance as complex as this one.
The second issue is that the width of the duty upon the LBRO to give guidance and to support the giving of guidance by regulators under their respective Acts means that a direction made by the LBRO will still have legislative character. This raises the question as to whether the powers contained in the Bill can be justified. Before attempting to give my answer, it is
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Amendments Nos. 33 and 52 do not change the fundamental position; they reduce the powers so that they can only be exercised without parliamentary scrutiny if they are applied to one local authority. Thus, if it were judged that the regulatory behaviour of Camden in response to guidance was inconsistent with that of Cornwall, and that both were in error, a direction could be given first to one and then to the other to get into line. It seems extremely unlikely that one ever could achieve consistency between Northumberland and Hackney, for example. The process could either start under Clause 7 with the LBRO or under Clause 15 with the Secretary of State.
At this stage—again I apologise for speaking at some length—I will say more about how directions have come to be used to seek powers as wide as those in Clause 7, which need compelling justification. There are two reasons. As directions never have been, and are not, subject to parliamentary scrutiny and approval—and usually must be complied with—successive Governments have introduced them into Acts for limited purposes. The two accepted purposes are, first, for administrative reasons—matters such as how to prepare accounts or keep asset registers in line with Treasury practice—and, secondly, as a power of last resort. That is why one was pursuing backstop, compulsory and reserve powers. A power of last resort is to be used if and when a public body moves too far away from the purposes set for it by Parliament—so far, so good—and is well recorded in accepted commentaries such as Bennion and Craies. Later in the Bill, we will come to amendments which follow the Constitution Committee’s similar views on the subject of directions and the need to be cautious because of the lack of parliamentary scrutiny.
I turn to my second main issue. In recent years, the use and potential use of directions have been widened to include things such as general and policy directions and, in this instance, to include two ways—one direct and one indirect—in which guidance can be turned into an instruction on behalf of the Secretary of State, either on the LBRO’s own initiative or as a result of an initiative by a regulator. I believe that this puts local authorities in an impossible position. If so little confidence is shown in their ability to follow and resolve regulatory issues and if the determination of how they should be resolved is to move them into the hands of a centralised public body doing the bidding of the Secretary of State, why should local authorities be diligent? They could tell themselves and their constituents that, once again, they must do what they are told. It is no fun barking when a bigger dog is about to tell you how and when to do so.
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These unprecedented powers are constitutionally undesirable in their own right and will damage the performance of local authorities. The clause should be dropped from the Bill.
4.45 pm
Lord Cope of Berkeley: I share the concern of the noble Baroness and my noble friend Lord Eccles over this clause because of the weakening of local authorities’ independence and freedom of action, which Clause 7 and, for that matter, some of the other provisions, including those in Clause 15, represent. I understand that in negotiating or trying to get someone to do something, it is a good idea to speak firmly and even better if you also have a big stick behind your back that the other party knows is there and that you can wave at them. Clause 7 is the big stick to follow the guidance.
I was interested to read the guide to the Regulatory Enforcement and Sanctions Bill, which the Minister kindly had put in the Printed Paper Office. I was particularly interested in the sections dealing with when guidance will be given. Question 10 of the document is headed, “What will LBRO issue guidance about?”. The answer is that it will,
It is all about good practice, apparently.
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