PARLIAMENTARY DEBATES HOUSE OF COMMONS OFFICIAL REPORT

Tenth Delegated Legislation Committee

DRAFT LOCAL GOVERNMENT (TRANSPARENCY) (DESCRIPTIONS OF INFORMATION) (ENGLAND) ORDER 2014

Thursday 17 July 2014

PUBLISHED BY AUTHORITY OF THE HOUSE OF COMMONS LONDON – THE STATIONERY OFFICE LIMITED £3·00 Members who wish to have copies of the Official Report of Proceedings in General Committees sent to them are requested to give notice to that effect at the Vote Office.

No proofs can be supplied. Corrigenda slips may be published with Bound Volume editions. Corrigenda that Members suggest should be clearly marked in a copy of the report—not telephoned—and must be received in the Editor’s Room, House of Commons,

not later than

Monday 21 July 2014

STRICT ADHERENCE TO THIS ARRANGEMENT WILL GREATLY FACILITATE THE PROMPT PUBLICATION OF THE BOUND VOLUMES OF PROCEEDINGS IN GENERAL COMMITTEES

© Parliamentary Copyright House of Commons 2014 This publication may be reproduced under the terms of the Open Parliament licence, which is published at www.parliament.uk/site-information/copyright/. 1 Tenth Delegated17 JULY 2014 Legislation Committee 2

The Committee consisted of the following Members:

Chair: SIR EDWARD LEIGH

Blears, Hazel (Salford and Eccles) (Lab) Jowell, Dame Tessa (Dulwich and West Norwood) Coffey, Ann (Stockport) (Lab) (Lab) † Coffey, Dr Thérèse (Suffolk Coastal) (Con) † Kelly, Chris (Dudley South) (Con) † Fabricant, Michael (Lichfield) (Con) † Pugh, John (Southport) (LD) † Sawford, Andy (Corby) (Lab/Co-op) † Glen, John (Salisbury) (Con) Simpson, David (Upper Bann) (DUP) Godsiff, Mr Roger (Birmingham, Hall Green) (Lab) † Smith, Henry (Crawley) (Con) † Graham, Richard (Gloucester) (Con) † Thornton, Mike (Eastleigh) (LD) † Hopkins, Kris (Parliamentary Under-Secretary of Wood, Mike (Batley and Spen) (Lab) State for Communities and Local Government) Committee Clerk Jackson, Mr Stewart (Peterborough) (Con) David Slater, † Jones, Susan Elan (Clwyd South) (Lab) † attended the Committee 3 Tenth DelegatedHOUSE OF COMMONS Legislation Committee 4

drive down costs. This is not just a whim; since we Tenth Delegated Legislation took office, we have reversed the central command and Committee control of the last Administration and we have given unprecedented control to local councils and local people for the delivery of local services. The code is another Thursday 17 July 2014 step in that journey. Local people want their council to publish key information. The Bedford citizens panel survey showed [SIR EDWARD LEIGH in the Chair] that 64% of respondents thought it was very important that councils make data available to the public. Over Draft Local Government (Transparency) half of the respondents said that they were most interested (Descriptions of Information) (England) in seeing the data made available about council spend and their budgets. Research by Ipsos MORI has found Order 2014 that the more that citizens feel informed, the more they tend to be satisfied with public services and their local 11.30 am authorities. The Parliamentary Under-Secretary of State for However, councils’ performance on that is still patchy. Communities and Local Government (Kris Hopkins): I Although some are embracing the importance of beg to move, transparency and giving local people the information That the Committee has considered the draft Local Government they want, others still have a long way to go and their (Transparency) (Descriptions of Information) (England) Order performance has tailed off. The Local Government 2014. Association survey found that of the 113 respondents, It is my first opportunity to serve under your only half published contract information in line with chairmanship in my new role, Sir Edward. The order the then voluntary recommended transparency code. expands the descriptions of information about which Earlier this year, the Press Association found that a the Secretary of State may require authorities to publish number of local authorities were not publishing timely information more frequently than annually. On 1 May, spending data at all. We have to get rid of all the waste under section 2 of the Local Government Planning and that is out there in local authorities. Local authorities Land Act 1980, the Secretary of State issued a code of now need to make sure that they are accountable to recommended practice on the publication of information those who matter most—local people. by local authorities, called the local government In conclusion, the order is the culmination of over transparency code 2014. It is the Government’s intention three years’ experience of local authorities implementing to make a legal requirement of local authorities to a recommended transparency code. During the recent comply with part 2 of that code, and that should consultation, nobody questioned the Government’s include a requirement to publish information on a intention to require councils to publish quarterly data quarterly basis about their spending and the contracts about their spending and the contracts they sign. Indeed, they enter into. some respondents told us they were already doing that However, the Secretary of State may only require and, further, were publishing a monthly publication. authorities to publish information on occasions recurring Let me be clear: local people and local authorities say more than once a year if the information falls within the they want greater transparency, which brings benefits. description of the information to which section 3(4) of Local authorities need to progress in publishing key the 1980 Act applies. Therefore, the order adds to the basic data, which has been patchy. Greater transparency descriptions of information about which the Secretary can help secure better public services and accountability, of State may require authorities in England to publish and increased economic growth. Respondents to the information more than once a year—namely information Government’s recent consultation did not question the about: any expenditure incurred by authorities, including quarterly publication of expenditure and contract expenditure exceeding £500 and Government procurement information. We should listen to those messages. I card transactions; and any legally enforceable agreement commend the order to the Committee. entered into by authorities and invitations to tender for such agreements. 11.36 am I turn to the reasons for the code. The average band D council tax payer gives their local authority £122 a Andy Sawford (Corby) (Lab/Co-op): It is a pleasure month. Hard-working taxpayers deserve excellent services to serve under your chairmanship, Sir Edward. You are, that meet their needs—I have to say that the vast like me, a veteran of conversations over the past year majority of councils provide that—and they have a about transparency and audit in local government. I right to know how their hard-earned money is spent welcome the Minister to his new role. I was not aware, and how their services are delivered. They also have a until moments before the start of the sitting, that there right to ensure that their council is getting the best deals had been a reshuffle in the DCLG team. I look forward to make every pound spent work just a little bit harder. to, I hope, continuing the constructive relationship that Taxpayers have a right to know what their council is I had with his predecessor. We disagreed on many doing. It is reasonable to expect councils to publish all occasions but we always maintained a civil relationship the information they hold, unless there is a good reason and found the opportunity to make common cause in not to, such as child protection or commercial sensitivities. some respects. Taxpayers should also be able to challenge councils in One of those common causes has been around cases where they may be wasting money, acting as transparency and local government. I am a localist. The an incentive to councils to keep looking at how they Labour party has broadly supported the changes to the 5 Tenth Delegated17 JULY 2014 Legislation Committee 6 audit system, with some very significant reservations. details of contracts for more than £10,000. Many authorities We are moving into a new world of public audit for already do that on regional portals, but the code, by local authorities, in which the public will no longer be having a lower threshold of £5,000, requires authorities able to see, through the work of the Audit Commission, to duplicate that information: once for the code, and how effectively a local authority spends its money and once for the portals that have the higher threshold, in whether they are getting value for money. We regret the line with central Government. Will the Minister comment loss of that element of the role of the Audit Commission on why the threshold has been set at a different level? and we would have looked to enhance the role of, for That does not make obvious sense. If there is a case for example, the National Audit Office or, indeed, the a £5,000 threshold, perhaps that should apply to central consortium of local authorities that are going to come Government as well, but it seems that £10,000 might be together to provide audit, to offer that, benchmarking more reasonable and in line with the current approach the ability for the public to see whether their council is to the portals. I will be interested to hear his explanation. providing value for money. Things have been lost. We would support not one threshold or the other, but a Looking at the order, our question is: how effectively sensible and coherent argument for the most appropriate does the schema of publication of expenditure over threshold in the interests of transparency that looks at £500 fill that gap and enable the public to really see the level and kinds of transactions that take place at what is happening in their local authority and to understand both levels of government. what the value for money is? We urge the Government On Government procurement card transactions, such to undertake a serious review of the experience of cards are used primarily by central Government and recent years and, in particular, to ask the public what much less by local government, so the need for this their experience has been of the ability to see what requirement, as distinct from general expenditure over transaction has taken place in local authorities and £500, is unclear. For those in local government who do what the different areas of expenditure are, how effectively use GPCs, their statements may not include the description they have been able to challenge the local authority in a of goods and services; in which case, that information constructive way, and what change has resulted from would have to be entered manually by local authorities, the scrutiny that they have been able to bring to bear which would add a burden to the publishing of that through seeing those transactions. That would have information. What thought has the Minister given to been a helpful staging point before developing the quite that additional burden? He talks about efficiency in prescriptive order. local government and I am sure that he would not want There are other inconsistencies in the Government’s to burden it additionally without thinking through why approach. The Minister tells us that it is important that that is necessary. There is again inconsistency between local authorities should publish the information, yet, the way in which local and central Government are Sir Edward, as you will know from the extensive debates being treated. that we had about the demise of the Nene Valley News On grants to voluntary, community and social enterprise and other council publications, the Government have organisations, the Minister will be aware that there are made it much more difficult for local authorities to no settled legal definitions for these organisations. We communicate with their public, especially those who are have made inquiries and cannot find clear legal definitions, not readily online, where the Government tell us much so if the Minister is drawing on Acts of Parliament or of that information will be available. A lot of people some other generally recognised legal definition of what want to access information through traditional means constitutes such organisations, it would be helpful if he and the publication of data about local authority spending would share those sources to allow us and local authorities was a common feature of many of those council to interpret this measure. Indeed, if the public want to publications around the country that now, regrettably, challenge how local authorities are interpreting that, it no longer exist. Of course, where those publications would be helpful for them to check the definition put on were inappropriate, overly political or overly expensive, the record by the Minister today. they needed to be looked at, at a local authority level, but the prescription by central Government is something The lack of settled definitions makes comparisons we regret. between authorities difficult and means that they will The other inconsistencies concern some of the thresholds not be able to tell whether they are complying with the in the order. The code requires details of all invitations code or not. That might lead legal advisers to local to tender that are worth more than £5,000. You will authorities to adopt a precautionary approach that know, Sir Edward, through your experience of the could lead to too burdensome an interpretation of the Public Accounts Committee and public audit at central code’s requirements, with local authorities reporting Government level, that that is out of line with the extensively on transactions with small local organisations central Government requirement of £10,000. Why do that the Government may not have intended to capture. the Government think it is appropriate to set a different In recent years, local authorities have worked effectively threshold for local authorities from that for central to publish spending information and open up their data Government? Consistency would have been welcome, to local communities and business, who in turn are certainly in terms of the relationship that, I hope, can creating products and services that are having positive evolve in the future between local government and effects in their communities. Local government as a central Government—much more of a parity of esteem. model is becoming more diverse and developing a much We would look to have some equivalence in the thresholds. more diverse set of relationships across the public sector Will the Minister explain why the requirement was set and with local enterprise partnerships. Has the Minister at £5,000 and not £10,000? considered how transactions carried out by local enterprise The code requires publication of details of all contracts partnerships, or indeed combined authorities, will be or commissioned activity. Again, that is not in line with captured by the order? Where are the types of authorities the Government-wide procurement practice of publishing to which the order relates set out? That does appear 7 Tenth DelegatedHOUSE OF COMMONS Legislation Committee 8

[Andy Sawford] managed to sell Westgate car park for £1. They then bought it back a few years later for £1 million. What clear from the primary legislation. A good starting sort of social value do you think that generated? point would be to understand where those LEP transactions would appear. The Chair: Order. This is very interesting, but the Local government is also developing an increasingly word transparency leaps to mind, so if in answering complex set of relationships with the private sector, that point the shadow Minister could stick to his brief, I which again are not captured effectively in the order to would be very grateful. allow the public to see those transactions. I ask the Minister to look again at the strong arguments made by hon. Members during the passage of the Local Audit Andy Sawford: I am guided by you, Sir Edward, and I and Accountability Act 2014 for freedom of information will not be tempted down the road of commenting on a to extend properly to private sector contractors in respect very specific local issue, which I do not know the detail of audit and the transparency of the transactions that of. All I can say in response to the hon. Gentleman is take place in those relationships. that I was citing figures compiled from freedom of information responses that show that 30% of procurement by Labour local authorities is now procured for social Michael Fabricant (Lichfield) (Con): I was following value from local business, in comparison to 20% by the hon. Gentleman’s argument with interest, particularly Conservative councils. I am sure that there are some with regard to LEPs, but then he moved on to the outliers in respect of both parties, but I am proud that private sector. While I totally agree about the need for there is generally a really good track record now of transparency, does he fear, as I do, that he might be Labour local authorities procuring for social value. But putting an additional burden on to private companies, of course there must be transparency in that procurement which might damage their trading ability? and in those transactions. We will not seek to divide the Committee on this Andy Sawford: The hon. Gentleman makes a very issue, but I hope that the Minister will be able to important point, which is to recognise the burdens that respond to that range of points, and especially to the the order places upon those who are subject to it. We point about consistency around the thresholds, which have argued that the Government should think very leaps out at us as being something that local government carefully about the burdens they are placing on local will view as inexplicable and perhaps unfair. authorities who are captured by this legislation, and on the relationships between local authorities and the voluntary 11.48 am community and social enterprise organisations, albeit Kris Hopkins: I thank the hon. Member for Corby for ill-defined within the order. That burden should be his comments and I look forward to a very constructive proportionate, in the interests of transparency, but of relationship with him. He is right that on quite a few course it should be consistently proportionate and occasions we probably will not agree, but we should be transparent in connection with the relationship with the respectful and decent to each other and I am sure that private sector. we shall have some robust and sensible conversations in We would not wish to see an unfair burden placed future. upon, for example, small and medium-sized enterprises The hon. Gentleman raised the issue of figures and that contract in my own area with local authorities— transparency, and the £500 figure. I think a lot of especially Labour councils, who are much, much better people out there are sceptical of councils. I will be at procuring for social value. All the evidence shows honest, as a former council leader: I do not think they that Labour local authorities around the country are should be. I think there are some extremely dedicated really leading the way now in procuring for social value and professional individuals there. But if the publication through local SMEs. We would not want to see an of this information gives the public some confidence unfair burden placed upon that relationship in terms of around this issue, I think we should support the order—we the transparency and reporting. But we do want to see should do this. some transparency in how public money is spent, of course. My experience is that there is limited information out there for the public, and they see large councils, particularly, I would ask the Minister to think about that relationship as impenetrable organisations which they sometimes with the private sector. This could be captured by the feel disconnected from. An opportunity to articulate extension of freedom of information legislation. We did the spend and the contractual arrangements between have some indications, during the passage of the Local businesses and organisations is extremely important. Audit and Accountability Act 2014, that the Government would take this away and look at it. I did understand The question was asked, why £5,000 as opposed to that there was consideration to look for an alternative £10,000? I confess I did not know about the £10,000 legislative vehicle for that, and I should be really grateful threshold for central Government. I do know that in if the Minister would give us an update. council areas small and medium-sized businesses will have more access and more ability to connect with that smaller contractual agreement of around £5,000 than Richard Graham: The hon. Gentleman made a rather maybe a central Government contract of £10,000. So, curious statement just then—that Labour-run councils rather than excluding some businesses by not providing were much better at creating social value. May I give information on contracts worth less than £10,000, we him a small illustration of diametrically the opposite? think the right thing to do is to publish the information Gloucester city council, when it was run by the Labour where contracts exist and enable people to see what group in collaboration with the Liberal Democrats, kind of business, what kind of trade and what opportunities 9 Tenth Delegated17 JULY 2014 Legislation Committee 10 there are for businesses in those local communities to my shorter experience of dealing with legislation—I apply for future contracts and opportunities to grow have served on several Public Bill Committees—the their businesses. precise meaning of language, including where one is seeking to define types or classes of organisation, can Andy Sawford: I broadly agree with the Minister’s be very important. We should expect a clearer definition point. I welcome his acknowledgment that in supporting behind this, rather than say it is up to local authorities. the £5,000 threshold in this order, the £10,000 threshold Otherwise, it is rendered less meaningful for the public’s was not in his mind; rather he was thinking about what guarantee or assurance of transparency, if it is entirely was most appropriate at a local level. I can see where the down to local authorities to interpret terms that ought Minister is coming from, and it relates to the point to be clearer in the context of the order. about social value. I would urge him though, given his remarks, and given the stated strategy of the Cabinet Office to increase procurement for social value, and for Kris Hopkins: My understanding is that the definition central Government to procure from SMEs, to take the of voluntary and community groups was agreed with opportunity, perhaps through Cabinet Sub-Committees the LGA and umbrella organisations. That is where I or elsewhere, to make representations to his colleagues stand on this. I have listened to what the hon. Gentleman across central Government about that £10,000 threshold. said. I want to have a really constructive relationship with the LGA and I have had an extremely successful Kris Hopkins: I will confess that over the past 24 hours relationship with voluntary organisations in the past. I this £5,000/£10,000 debate has been burdening me. I want to go and have that conversation with the LGA to will go out and explore with the Cabinet Office the issue get some reassurance. that the hon. Gentleman raises about the £10,000. He raised an important point around transparency and communications. My experience at local level was that Andy Sawford: I thank the Minister for that reassurance. my local media were never shy to explore published Will he please write to me with that definition? That data. The more information we can get out there, the would be very helpful. better; we have a free press and we have a challenging opportunity. Opposition councillors were very robust in their challenge. Scrutiny committees also play an important Kris Hopkins: By all means. I will also write to him on part in that challenge. The information placed before LEPs and the funding that they receive, because I would them gives them that opportunity to challenge council also like some clarity on how that is established. Between leaders and portfolio holders and the officers of the the Government and the LEPs, the growth deals have a council. clear contractual arrangement on delivery and that will The issue around burdens on councils is an important be transparent. Where councils will be involved in that debate. We went out and asked local authorities how process is something to explore further. much they estimated this further burden on them would On private sector businesses and FOIs, I take the cost and they came back with a figure of around point made by my hon. Friend the Member for Lichfield. £4 million. We would seek to compensate them for that, I do not want to put greater burdens on private businesses. to ensure that they have moneys available to address Where public money is being spent by local authorities, that liability. there should, and will be, openness on the council side On definitions of voluntary and community groups, about which private business has received that money. we went to the London Government Association and spoke to umbrella organisations in the sector to get that Finally, I want to touch on consultations. The definition. We will not be prescriptive about who should Government, engaging with the LGA, held three apply in each different locality. Different businesses and consultations and three workshops, which 63 authorities voluntary groups will want to participate. The fact that attended to discuss our proposals. Next year, we will we have published the information means they can see review the order that we are seeking to put in place. I the opportunities their individual organisations have to hope that the Committee will support it. grow their sector, organisation or business. Question put and agreed to.

Andy Sawford: It was representations from the LGA to me that led me to raise such a serious issue. It is 11.56 am concerned about the lack of definition. Secondly, given Committee rose.