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I thank the Minister for her answer about the question on the Treasury, but the point goes rather wider. For example, in relation to a housing corporation’s finances, the Housing Associations Act 1985, which is still relevant, states:
“The Treasury may issue to the Secretary of State out of the National Loans Fund such sums as are necessary”,
The Treasury comes into the whole question of borrowings, the terms on which the borrowings are made and on repayments in one or other of the Acts. It is not only a matter of the accounting directions, which is an administrative matter about which I have no problems. I can see that it is entirely sensible to be controlled by directions issued by the Secretary of State with the approval of the Treasury. The Minister said that it was not necessary to have that in the Bill. I think that it would be better to include it, but I would not die in a ditch over it. However, other aspects of the Treasury's involvement need to be reconsidered.
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Baroness Andrews: I certainly respect the noble Viscount’s experience, and I listened hard to what he said. However, I regret that I forgot to answer the point made by the noble Earl, Lord Cathcart, about the annual report. I will have to write to him about the timing of the annual report because this is a question that is being sorted out as the transition moves forward. Annual reports are usually public documents, but I will certainly be writing to him about the questions he raised.
Viscount Eccles: This morning I was reading on my parliamentary laptop the 2006-07 report published in July 2007. I shall refer to it again on the matter of committees—it is absolutely clear about what the affairs of English Partnerships have been. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bassam of Brighton: I beg to move that the Committee do now adjourn during pleasure for a period no longer than 15 minutes.
Moved accordingly, and on Question, Motion agreed to.
[The Sitting was adjourned between 6.08 and 6.23 pm.]
Baroness Hamwee moved Amendment No. 8:
The noble Baroness said: In moving Amendment No. 8, I shall speak also to Amendment No. 9. Amendment No. 8 removes a provision of the schedule and replaces it with pretty much, but not quite, the exact opposite. This is another point about governance. It is not at all personal to any members of staff of the HCA who have been or may be appointed, but it is to provide that no member of staff should be a member of the board, a committee or a sub-committee. The noble Viscount, Lord Eccles, trailed this in his last amendment, and I entirely agree. Members of the board and members of the staff have entirely distinct roles and responsibilities in an organisation of this sort, which should not necessarily follow the model of a city corporation or a PLC. They are quite different responsibilities and it muddies the waters if the chief executive—I assume that that would be the member of staff primarily at issue—takes board decisions.
I raise this point in the particular context of London, where I understand—although I do not know whether it is still proposed—that the Mayor of London will chair the London sub-committee with the chief executive being the vice chair. That muddles who is taking the decisions. Political decisions as well as executive decisions will have to be taken. I am not suggesting that the chief executive and others will not contribute to the making of policy, but policy is made and the executive should carry it out. I have said enough for the Minister to respond. One could obviously have this debate in great detail and at great length, but I suspect that that would not be favourable to the Committee this evening. I beg to move.
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Baroness Ford: I am not in support of this amendment, and I will explain why by way of illustration. The kind of committees and sub-committees that I imagine the Homes and Communities Agency will have will not be dissimilar to the type that we had at English Partnerships. One example would be the Milton Keynes Partnership Committee, where not only were non-executive board members of English Partnerships in membership, but the chief executive was the accounting officer of the organisation, so it is not dissimilar to what is being proposed in London. The practical point is that not only was the Milton Keynes committee very time consuming and we could not always ask non-executive board members to give the amount of time or expertise that was necessary, but there were day-to-day delegations to that committee that could best be supported by full-time members of staff. The sub-committees that the agency will have are different from the kind of committees and sub-committees that one might find in a local authority—they tend to be more executive in nature than concerned with policy. For those reasons, I would encourage the Minister to resist the amendment.
I have a good deal of sympathy with the noble Baroness, Lady Hamwee, about the mayor chairing that London committee. We must remember that more than half the budget of this organisation will be invested in London, so this sub-committee will be an immensely powerful body. Notwithstanding the nature of the London sub-committee, the accounting officer of the organisation will still be personally accountable to the Secretary of State and to Parliament for the use of those funds, so it is essential that the accounting officer is a member of that committee. However, I would think that the more appropriate opposite number for the mayor would be the chair of the new organisation, although it is important that the accounting officer is there. For reasons of practicality, oversight and providing the best kind of advice, we must resist an amendment that would cut the accounting officer out of sitting on these committees. We could cast the net more widely and make sure that we had the right kind of executives on the type of executive committees that this agency will principally be engaged with.
6.30 pm
Viscount Eccles: I am a little uncertain. The annual report and accounts of English Partnerships records the audit committee, the remuneration committee and the major projects committee—I may not have the title quite right—and all members of the board are entitled to attend. Another, which I suspect comes out of the new towns, is Milton Keynes, which is a joint committee and has probably been in existence for a very long time. We are talking about committees and sub-committees of the board.
Baroness Ford: Perhaps I may clarify that. The Milton Keynes sub-committee is quite new. It was created only three years ago and is a full sub-committee of the English Partnerships board. Because it was a sub-committee of the board, our vice-chairman sat on that committee, but the accounting officer who had oversight of the investment programme of that sub-committee was a full member of our board. From the
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Viscount Eccles: I thank the noble Baroness for that and I am entirely sympathetic to the point. Under this paragraph, the Secretary of State is plunging into the game of committees to far too great an extent. I cannot understand why the agency cannot govern its own proceedings. Of course, there is some throwback to the 1993 Act, which states that,
But paragraph 5(2) of Schedule 17 of the 1993 Act states:
“The Secretary of State may give directions as to the exercise by the Agency of its power under sub-paragraph (1) to regulate procedure”,
which is strengthened in paragraphs 6 and 7 of Schedule 1 to the Bill. Has the Secretary of State ever given directions on how the board should proceed? Where are they recorded? No doubt, they would be in the accounts of the year concerned and not repeated every year. It would be interesting to see them.
I do not understand how a non-departmental public body can be expected to be independent and strong if it does not even regulate its own procedure. That is a contradiction in terms. People are appointed to be members of a board. There is a code of practice and guidelines, and you would expect it, led by its chairman, to regulate itself satisfactorily. The same thing is stated in paragraph 7:
“The HCA may, subject to any directions ... decide ... its own procedure and ... the procedure of any of its committees or sub-committees”,
which is a sweep up on top of all the other conditions put onto them. What sort of direction might the Secretary of State wish to issue to the HCA on its procedure?
Baroness Ford: Perhaps I may help with that. By and large, these organisations have been in charge of their own procedure. I take the noble Viscount’s point that the audit committee, the remuneration committee and the nominations committee were always simply comprised of non-executive directors, as you would expect in terms of good governance. Let us take the example of Milton Keynes: notwithstanding the fact that that sub-committee was to be a sub-committee of the English Partnerships board on direction or guidance or by request—I cannot remember which it was at that point—we were left in no doubt that the Secretary of State was very anxious that the local authority should have full representation on that body and that the business community and voluntary organisations would do likewise. I recall that the appointment of the independent chair to that sub-committee, Sir Robert Reid, notwithstanding the fact that it was a sub-committee of my board, was made by the then Deputy Prime Minister. I do not know whether that helps the noble Viscount or maybe just gives him more grist to his mill.
Viscount Eccles: I thank the noble Baroness for that. The Minister said earlier that directions were a powerful sanction weapon because you must comply
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I am on familiar ground of my own. I am bothered about the way in which directions are creeping into all kinds of Acts of Parliament when they are not necessary. They weaken the independence of the bodies concerned because if you know that there is a power in reserve to give you directions about how you should organise your own procedure, you cannot afford to ignore it and you have to take it into account.
It is always possible to have a committee of the board and to have the people who know what you need to know in attendance, but you do not always have to form a committee. If in another life I was the chief executive of the HCA and not on the board, I would be very quick to give the chairman advice about how to organise his committee structure.
Earl Cathcart: When I first looked at the amendments I thought they made good sense. The arguments have been developed a little further but to me it makes sense that no member of staff—and that includes the chief executive—should be a member of the committee or the sub-committee or on the board. For example, at a council level you do not expect the chief executive to be a member of the council. He attends all the council meetings, gives very good advice, which is valued and listened to, but he is not a member of the council. As my noble friend Lord Eccles said, he can attend sub-committees and contribute very well indeed, but he does not have to be a member of the board or the sub-committee and that is the right way round.
Baroness Andrews: It has been an interesting debate and I have learnt a great deal in the process. I am not sure that I will add very much to that sum of knowledge. This will not be the first time that I shall say how grateful I am to my noble friend Lady Ford for showing how, in practice, much of what we are trying to achieve with the HCA has been successfully anticipated in English Partnerships.
It is important that staff members of the agency are allowed to participate fully in some committees. Reference has been made to executive committees and we spoke earlier about the importance of expertise and practical, on-the-ground knowledge. That knowledge also needs to be in committees, as appropriate. A practical example is the finance committee that currently exists for English Partnerships. I know noble Lords will agree that it is right and proper that the finance director for English Partnerships is allowed to sit and participate in that committee and take part in decisions. If the amendment were agreed to, that simply would not be possible.
As my noble friend Lady Ford said, the HCA will have numerous committees and sub-committees. We have a practical problem here because if we do not have expert staff supporting the work of those committees, we will have to have a much bigger
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On the point made by the noble Baroness, Lady Wilkins, the London sub-committee will be an extremely important part of the HCA board. The noble Baroness is quite right, the chief executive will be the vice-chair of the committee and the Mayor of London will act as the chair. For all the reasons that the noble Baroness knows from her wide experience of governing London, we see the chief executive’s position as absolutely essential, given the challenge posed by housing and regeneration in the city. The intention is that the committee will report to the HCA board on the scope and level of work undertaken by the agency in London, and the involvement of the chief executive will help to ensure that it meets the needs and requirements. The specific arrangements for that sub-committee are still being decided.
I shall turn to the final amendment in this group and pick up some of the points that the noble Viscount, Lord Eccles, made. In it, the noble Baroness seeks to ensure that staff members cannot easily become full members of committee. Paragraph 6(4) of Schedule 1 would allow staff members to become members of a committee or sub-committee, but only with the express approval of the Secretary of State and, given what the noble Viscount has said about the role of the Secretary of State, I cannot believe that he would welcome that. It would certainly create an additional workload, and it is inappropriate for the Secretary of State to be involved at that level of detail. It does not make any sense. We, like him, expect that matters of this sort will be discussed and agreed amicably. For example, we will be discussing the role of key staff, such as the chief executive and the financial director, in the internal governance committees in the HCA and the role that staff will play. This will be managed sensibly, but the board will be accountable to the Secretary of State for the operations of the agency, with the staff being accountable to the board, subject to their overall accountability to the Secretary of State. I shall not repeat myself, but I hope that that response helps to clarify the roles we expect members and staff of the HCA to play in relation to committees and sub-committees.
The noble Viscount, Lord Eccles, asked whether we know of any directions that have been issued in this context. My noble friend Lady Ford referred to the direction that has been required for the Milton Keynes partnership. I do not know of any others. Although the power is in the Bill, it is extremely unlikely that the Secretary of State would issue
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Baroness Hamwee: I remain troubled. There is no suggestion that the chief executive or other members of staff should not attend and give advice, but there is an enormous distinction between advising and being part of the decision-making process. The Minister referred to the staff being accountable to the board. That is how I still see it. I also find troubling the proposition that one has to create a committee substantially consisting of staff because the board members cannot manage to attend the number of committees, particularly when it is possible to appoint people outside the pool of board members and staff to committees and sub-committees. Perhaps we should look at the scheme of delegation for the new agency when it comes along. I do not want to try to trip up the noble Baroness, Lady Ford, but it occurred to me that in the scenario she painted there might be the possibility of a quorum being achieved by members of staff only. She is nodding. That supports my case. I will think about this further. For reasons known by those who have followed the recent sagas in London, governance arrangements are uppermost in my mind, and I would like to see this governance-proofed, if I can put it that way, before we give it our blessing. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 9 to 12 not moved.]
6.45 pm
Lord Dixon-Smith moved Amendment No. 13:
Clause 2, page 1, line 10, leave out “The” and insert “Working through the planning system and in partnership with local government and the other agencies already involved, the”
The noble Lord said: It is a pleasure to return to the beginning of the Bill. It is quite unusual to commence a Bill at the end. I compliment the Government on the brevity of Clause 1, which is remarkable. It fulfils all the needs because the detail is in Schedule 1.
We now turn to Clause 2, which is not quite so satisfactory. It is drafted in perfectly clear language and states:
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That may be fine for English Partnerships and the other, what I would call, contributory bodies being subsumed into the organisation, but although one has no difficulty with the objects, the clause does not pay due respect to all the other organisations involved. Standing in isolation, if the board were to look at those objects and say, “This is our function”, it would not work. We know it would not work; the noble Baroness knows it would not work; and she has said so. I am the first to acknowledge that she has made it perfectly plain that if this new agency is to work well, it has to work within the planning system and in co-operation with the local authorities which deal with planning and so on.
The amendments in this group are simply designed to make that plain. The way in which the clause is drafted is almost cruel as it disregards the huge quantum of work that is done across the whole community, with no acknowledgement whatever.
I shall be a little naughty and quote from a couple of speeches which the noble Baroness made recently. She will recognise them. The Minister said:
“I stress that the Government will look to involve and consult closely local authorities when the use of these clauses is being considered. Indeed, in the one example that we have so far, when English Partnerships used its similar powers in Milton Keynes, the local authority was fully involved in establishing the delivery vehicle.
“With such a range of powers, noble Lords will want to be assured that we are not creating a behemoth or a juggernaut that will slow things down, impose top-down demands or frustrate other partners—whether housing associations, regional development agencies or local authorities. ... The relationship between local authorities and the HCA will be critical. The agency will be no less than local government’s best delivery partner, working with the grain of local ambitions and local needs, while securing the achievement of government targets”.—[Official Report, 28/4/08; col. 43.]
That is absolutely fine. A bit later on the same day, the Minister went on:
“With powers come relationships, particularly relationships with local authorities. The powers of the HCA are wide because the task is wide. I believe the objectives that we have already expanded upon in another place meet the task before us. Because the objectives are wider, the powers we are taking—in relation to planning they are inherited powers—will be wider, too. Let me give the sort of assurances that were given time and again in another place by Ministers that the powers that we have taken are exceptional. They will be exceptional in use and will be governed by the Secretary of State's involvement. We will be in discussion with local authorities on the very rare occasions when the HCA needs to take planning powers... I turn to relationships with local authorities, which goes to the heart of much of what the HCA will be able to achieve... The HCA sits within the planning system. Nothing that the HCA will do will be outside the planning system. Its relationships with the regions—the regional spatial economic strategies, the future single regional strategies and local development plans and frameworks—will be crucial... the key to success will lie in its ability actively to collaborate at regional and local levels”.—[Official Report, 28/4/08; cols. 115-116.]
I could go on—I have more underlined—but I really could not have put it better myself.
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