Nick Hurd (Ruislip - Northwood, Conservative)

I beg to move, That the clause be read a Second time.

Michael Lord (Deputy Speaker)

With this it will be convenient to discuss the following amendments: No. 22, page 4, line 21, clause 4, at end insert—

'( ) The Secretary of State must make the first arrangements under this section within the period of 18 months beginning with the day on which this Act is passed.'

No. 23, page 4, line 26, leave out 'commencement of that subsection' and insert

'day on which this Act is passed'.

No. 24, page 4, line 27, leave out 'commencement' and insert 'day'.

No. 25, page 4, line 28, leave out clause 5.

Nick Hurd (Ruislip - Northwood, Conservative)

I rise to move the new clause, numb with the realisation that it is almost five months to the day since the Bill passed its Second Reading in this Chamber. At times it has seemed a lot longer than that; there were periods when it seemed that the Bill would never leave Committee and that it was the fate of those condemned to serve on it to spend every Wednesday morning of their elected life turning up at Committee Room 10 to be told that they had to wait. I was once asked whether we were waiting for Godot or for Gordo, but the truth is that we were waiting for Government amendments, which were necessary because the version of the Bill that was considered on 19 January was honest but imperfect.

Amendments and new clauses have finally arrived, and they reflect the fact that we still have a bit of talking to do on Report. That is unsurprising, as the Bill is controversial. It plays a modest part in a wider process of great change in how decisions in the public sector on behalf of the communities we serve will be taken in future.

In considering new clause 6, it is important to remind Members of the premise of the Bill. In shaping the future of the communities where we live and work, meet our partners and friends and raise our children and grandchildren, we must accept that local people know best. If we want to engage local people in decisions we must give them greater influence and power over them, and as we agreed during our proceedings—the Minister accepts this—power is money.

Philip Davies (Shipley, Conservative)

I congratulate my hon. Friend on getting his Bill to this stage. In terms of new clause 6, I agree with the thrust of what he says: local people know best and they should have more control over things. However, does he agree that the Bill is only as good as the Secretary of State, and that it is implicit in it that the Secretary of State thinks that local people know best? Does he have confidence in that?

Nick Hurd (Ruislip - Northwood, Conservative)

I accept the premise of my hon. Friend's intervention. In the end, these matters will be down to the will of the individual Secretary of State. There are always ways and means that they can use: if the Secretary of State of the day is unhappy with the mechanics, processes and principles underlying the Bill, I am sure that clever people will be engaged to throw as many obstacles as possible in the way. However, I sense that there is a cross-party consensus in the House in favour of greater devolution. The test is how far any Government are prepared to go.

That brings me on to the main point on new clause 6. It is intended to replace clause 5, which is the key clause in the Bill as it is the ultimate test. It is the real test of how far any Government are prepared to go in giving people power, because it is designed to give them much greater influence over how money is spent in their community. As I have said, our sense during our deliberations is that the Government are genuinely committed to devolution; a large body of their legislation travels in that direction. However, we appear to have hit a buffer in terms of the test I have described and what the Government are prepared to accept.

New clause 6 is supported by the hon. Members for Falmouth and Camborne (Julia Goldsworthy) and for Stroud (Mr. Drew). It is intended to be a compromise, and it is important to set it in context. You do not need me to tell you that five follows four, Mr. Deputy Speaker. Clause 4 is important, and therefore so is what follows it. I like to think of it as a small grenade thrown into the tranquil pool of public spending. There are currently plenty of fish swimming in that pool leading a calm life, but clause 4—an emotive term historically for the Labour party—will stir the waters. If the provisions of the clause are implemented, for the first time every community will be able to see how almost every pound of taxpayers' money is spent in that community; it is currently impossible to trace such money in that way. The example that we used in Committee was of £9 billion of taxpayers' money being invested in Kent and only £2.5 billion—still a huge amount—being under the control of the local authority. That left £7 billion being spent by central Government in a way that is very hard to map.

Bob Neill (Bromley & Chislehurst, Conservative)

My hon. Friend will know, as will the Minister, that the London borough of Bromley has raised this issue on an number of occasions. We have highlighted the difficulty of tracing precisely how much funding all the agencies receive. In relation to formula grant, the headline figures often bear little relation to what is actually available and frequently render meaningless the various indices by which the Government calculate deprivation and so on. I congratulate my hon. Friend on introducing this important proposal for much greater transparency and local planning.

Nick Hurd (Ruislip - Northwood, Conservative)

I thank my hon. Friend for his constructive intervention. It is helpful for us to understand that this is a real issue in Bromley.

The Minister fully understands the significance of clause 4, and the opportunity that it provides to place every public sector budget under scrutiny with a much greater degree of transparency than exists today. The question is: how will the public react? They might shrug with a great gesture of collective indifference, but we believe that they will not. Once the spotlight has been shone into every nook and cranny of public expenditure, great curiosity will be aroused and elected representatives will be encouraged to campaign for something different. This will really stir things up.

The importance of new clause 6—and old clause 5 —is that it has to follow on because it enables a response. We will give people the information and show them the money. This provision provides a mechanism that will allow them to respond and to argue for the reallocation of resources in the light of the information that they have received.

Greg Knight (East Yorkshire, Conservative)

I hope that my hon. Friend will not mind my making a minor criticism. Why did he not include in subsection (5) a duty on the Secretary of State to report back to the House?

Nick Hurd (Ruislip - Northwood, Conservative)

The short answer to that question is that we did. We had considerable debate in Committee on the mechanics of accountability. The great driving forces behind the Bill are transparency, accountability and empowering people. There was a debate about the need for the Secretary of State to report back to Parliament, but there was push-back from the Government on that. Perhaps the Minister will comment further on that when he responds today. I would also encourage my right hon. Friend to come back to the Minister on that point.

The new clause will allow a local authority to come back as a clear first among equals and to say, "We and the communities that we serve know that we have different priorities."

Daniel Rogerson (Shadow Minister, Department for Communities and Local Government; North Cornwall, Liberal Democrat)

I congratulate the hon. Gentleman on all the work that he has done on pushing the Bill through, during the many months that we have had to wait for it to return to the House. He is making a crucial point. Does he agree that this is the reason that the Bill has created such an upsurge of support from various organisations across the country? They see it as a significant measure, not just as a means of assessing and discussing the administration of local functions. They see that it could provide the opportunity for change and for new ways of doing things in each local area.

Nick Hurd (Ruislip - Northwood, Conservative)

I could not agree with the hon. Gentleman more. I am looking at the measures through the prism of my own constituency, as every Member will. We all know that money cannot buy love, but it can save a post office, it can keep Northwood police station open for longer hours, it can hire more youth workers to work with kids and keep them off Joel street on a Friday night, and it can go towards a new youth centre. What we want, and what I believe the Minister wants, is for local communities to engage and to feel that they can influence these decisions.

I am sure that every Member is as concerned as I am about the growing sense of drift and distance from the political process. People really do not feel that it is worth getting involved. The driving force behind the Bill is that we want to send a powerful signal that it is worth getting involved because there is a decent chance of changing things. We do not underestimate the difficulties involved, but if we can create a mechanism that will allow local communities to influence the way in which taxpayers' money is spent in their area, we hope—it might be a naive hope—that it will transform the level of civic engagement.

Philip Davies (Shipley, Conservative)

Will my hon. Friend elaborate on this subject, perhaps to whet the appetite of people in my constituency? Will he tell us what transfer of functions he envisages? Will the new clause provide an opportunity for far more to be decided at parish council level, rather than by district or county councils?

Nick Hurd (Ruislip - Northwood, Conservative)

My hon. Friend has asked for a specific example. If he has the time and inclination, he might like to read the record of our deliberations in Committee, where we went through a working example of a specific case. I do not know how active Business Link is in Shipley, but consideration was given in Committee to the proposition that if a local authority and a local community felt that Business Link was not doing an adequate job and that there was a better way of deploying the money that Business Link was spending to support local businesses in the area, they should feel free to make the case for the function and resources of Business Link to be reallocated. The crucial question was whether the local authority, if that was the body to which the function was reallocated, should be free to implement its own policy, perhaps for supporting small local businesses. It might, for example, decide that it wanted to keep post offices open and reallocate money for that purpose. There would be an active dialogue with Business Link on the issue, and if Business Link did not co-operate, the local authority would have the right under the new clause to go to the Secretary of State and say, "We have a mandate from the community. We believe that this is the right strategy for supporting local businesses in our area, and we want the function and resources to be reallocated to us." I hope that that example helps my hon. Friend.

Philip Hollobone (Kettering, Conservative)

I congratulate my hon. Friend on steering the Bill so ably through the Committee, on which I had the honour to serve. His latest words will be very encouraging for the constituents of Kettering, where there is even now an example involving Business Link, although sadly this legislation may be too late to make a difference there. The East Midlands Development Agency has seen fit effectively to close the local Kettering business venture trust. Had this legislation been on the books, the local council could have made a powerful case to the Secretary of State for taking over the funding of the operation.

Nick Hurd (Ruislip - Northwood, Conservative)

I thank my hon. Friend for his intervention, which is helpful in illustrating and reinforcing the potential of the Bill and the new clause. I thank him, too, for the manner in which he has supported the Bill in Committee.

Mark Field (Cities of London & Westminster, Conservative)

I support what my hon. Friend is saying about encouraging flair and innovation in our local communities. Does he acknowledge, however, that certain concerns are being expressed? Will he comment on the argument that a postcode lottery might be created, given that so much of local government finance comes directly from central Government? Is that not an integral problem in many areas of public policy, but particularly in relation to the Bill? How would my hon. Friend counter the argument that a postcode lottery—which would run counter to the flair and innovation that he supports—might be created?

Nick Hurd (Ruislip - Northwood, Conservative)

I would counter the postcode lottery argument in two ways. First, please let us not be under the illusion that postcode lotteries do not already exist under the present system. Secondly, if we genuinely believe in localism, we have to tolerate differences in the spirit of innovation and with the full realisation that things might go wrong. Rather than accept mediocre standards across the board, we should have the chance to raise them somewhere, to develop best practice and to provide a mechanism for people to learn from other people. That is how I would respond to the traditional argument against localism, which is increasingly unsustainable.

I tried to make the point earlier that new clause 6 is a compromise. The original clause 5—the one that we now have is, I think, the third variant on the original—was much more radical. It would have given local authorities the right to recommend the reallocation of money without reference to functions being transferred, and with a strong presumption that the Secretary of State would accept local recommendations.

Philip Davies (Shipley, Conservative)

Will my hon. Friend give way?

Nick Hurd (Ruislip - Northwood, Conservative)

I should like to finish my point first.

New clause 6 would replace clause 5, which was a softened version of the original provision and gave the Secretary of State more leeway while still giving local authorities the right to argue for the reallocation of moneys irrespective of function. The Minister did not oppose the clause in Committee; in fact, in the afternoon sitting of 23 May he said that he did not intend to oppose new clause 3, as it was then. He was true to his word and we were told to expect amendments to the detail, but not to the principle.

Today, we shall be considering an amendment to remove clause 5 completely and when the Minister explains that proposal, he will—with your indulgence, Mr. Deputy Speaker—steer us towards his amendments to new clause 1. I look forward to his arguments that his proposals are an authentic and satisfactory response to the points we are making and the principles we are trying to establish and make clear in the Bill. In the distinctive spirit of consensus and cross-party support that is so integral to the Bill, we shall try to keep an open mind, but he knows that we were disappointed and have not been persuaded thus far, which is why we tabled the new clause as a compromise. We did so for two reasons, the first of which relates to form and narrative.

As I hope I have explained, we need a mechanism to follow clause 4. In Committee, there was much talk of the campaign for clear English, led by Frank Dobson, who pointed out that much of the legislation that leaves this place is impenetrable to the public. It was put to me that if the ten commandments had been handed to parliamentary counsel, the audience would have scratched their heads, saying, "What do you think he meant by that?" There is some truth in that observation.

The Minister's new clause 1—if I may refer to it, Mr. Deputy Speaker—has a useful provision about the right to transfer functions, which we have, in effect, copied into new clause 6, but it is in the wrong context—a national plan that is a one-off exercise in terms of the Bill. We see the publishing of local spending reports as a regular process that is subject to review, and certainly not as a one-off exercise. The Minister's proposal is in danger of leaving us with a Bill that lacks coherence.

Alan Beith (Berwick-upon-Tweed, Liberal Democrat)

The hon. Gentleman made a point about clear English. As we are trying to enable local communities to engage with public authorities on the direction of policy, we need to make changes in all the jargon—not just in legislation but also in reports and accountability statements—if people are not to be prevented by the opaque language used from understanding the very things the Bill is supposed to bring out.

Nick Hurd (Ruislip - Northwood, Conservative)

I thank the right hon. Gentleman for that helpful intervention, which I wholly endorse. The Bill is about enabling people; part of its driving force is to encourage greater participation so the least we can do is present the measure coherently and intelligently. Officials sometimes say that does not matter as long as we get the necessary powers. I do not agree. A Bill needs to tell a clear story about what it is trying to achieve and how it intends to do it. We should be clear.

My second point is about substance. If we are to accept—as a compromise—that the new freedom of local authorities should be restricted to arguing for reallocation of functions, we need comfort that what we believe is implicit in the Government's position is made explicit in the Bill: if functions are transferred, money should follow. It makes no sense to transfer functions without resources. I believe that is implicit in the Government's proposals but we want it made explicit. If functions and money are transferred, local authorities should have discretion over policy as long as they have regard to the objectives of their locally agreed community strategies—or sustainable community strategies, as we understand they are to be called. That is important for the reasons given by my right hon. Friend Mr. Letwin on 23 May. We do not want it to be necessary for remit to follow function, so that, for example, if a local authority takes over the functions of a Business Link it will not necessarily have to take over the statutory remit of that body. We want local authorities to be free to innovate, as long as they can be seen to be working towards achieving a locally agreed target under the local authority agreement process.

We want local authorities to have that right not least because it will incentivise greater co-operation. In such circumstances, Business Link would have to work harder to go with the grain of what the community wants, because otherwise it would risk losing resources or function. Fundamentally, such a right gives us a mechanism to shake up the system—to correct failure and encourage innovation when things are getting jaded and complacent. I am sure the Minister agrees, because he is not complacent. I read the Committee proceedings of 23 May carefully and when the Minister was questioned by my right hon. Friend the Member for West Dorset about remit following function, he said:

"That is not my intention."——[ Official Report, Sustainable Communities Public Bill Committee, 23 May 2007; c. 147.]

He then enthusiastically gave us examples of best practice and innovation, such as the south Devon youth club that had left a big impression on him when he visited it. When we stated that we wanted a presumption that local authorities should be able to get the Secretary of State's approval to take over spending, he said, "I agree". I am not trying to embarrass him by reminding him of his comments—as an experienced Minister he is beyond that—I am simply trying to explain that the new clause has been tabled in good faith.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

As ever, I am grateful to the hon. Gentleman for his courtesy. I am not at all embarrassed; indeed I am supportive of the point he makes. It may help the House if I point out that our policy in that regard has to be seen in the context of the architecture we are creating for local area agreements under the Local Government and Public Involvement in Health Bill. They are financial agreements as well as policy agreements.

Nick Hurd (Ruislip - Northwood, Conservative)

I thank the Minister. We are all sensitive to the fact that he and his officials are trying to wrestle with the difficulty of reconciling and marrying the little fish that is the Bill with the whale of legislative reform that he is trying to ride through the waters of local government. There is an honest attempt at integration and I do not underestimate the difficulties of achieving it, not least in terms of timing. I stress, however, that we tabled the clause in good faith because we thought it reflected the Minister's intentions and we wanted to make them explicit.

When the Minister responds, will he recognise that we need a mechanism to follow clause 4? Is he prepared to put on record the Government's acceptance that resources must follow transfer of functions? Did we understand him correctly in Committee when he appeared to agree that remit should not necessarily follow function—that local authorities should have discretion over policy when function is transferred as long as it is geared towards locally agreed targets? If so, will he explain why he appears to oppose the new clause?

I hope that the Minister accepts that our discussions have been open, but if we cannot reach agreement, my instinct, shared by co-sponsors of the Bill, is not to push for a vote on the new clause. There is strong support for the Bill inside and outside the House, as the Minister knows, and a desire to see us agree about it, but there will be disappointment if there is a feeling out there that the Government are diluting the measure. I shall listen carefully to the Minister's contribution and hope that we will hear reassurance that what we want made explicit is implicit in the Government's intentions and that there is an appropriate mechanism, or a willingness to find reconciliation and common ground. I have to tell him that we think there is unfinished business; we want to give people real power to influence the spending of taxpayers' money in their communities and, if need be, we shall continue the argument in the other place.

David Drew (Stroud, Labour)

I commend the promoter of the Bill. He has waxed lyrical and I have no reason to take up much of the House's time. I have attached my name to the new clause and I know that the spirit behind it is shared by Julia Goldsworthy.

As the Bill's promoter rightly said, we have taken an awful lot of time over the Bill. I think it is fair to say that, in recent weeks, I have seen more of him and the hon. Member for Falmouth and Camborne than I have of my family. I have also seen a lot of Lyn Brown and the Minister, and it is good to see Ron Bailey in his Box. Perhaps some of us will want to keep him in his Box.

Michael Lord (Deputy Speaker)

Order. The hon. Gentleman is an experienced Member of the House and knows that we do not refer in that way to people sitting outside the Chamber.

David Drew (Stroud, Labour)

I shall pay careful attention to your advice, Mr. Deputy Speaker.

Oliver Letwin (West Dorset, Conservative)

I am sure that the hon. Gentleman would not wish to mislead the House. It is quite impossible to imagine Ron Bailey in any kind of box.

Michael Lord (Deputy Speaker)

Order. That is not a very helpful intervention. I suggest that Mr. Drew moves gently on.

David Drew (Stroud, Labour)

I shall move speedily on.

This is an important new clause and it is clear that it will not be pressed to a vote. The spirit behind it is well intended and I hope that the Minister will clearly spell out how the Government intend to listen to what has been said in Committee and today. There must be a mechanism, because functionality without the resources to back it up involves a somewhat meaningless gesture. The Government have made it clear that the Bill must be been seen in parallel with the Local Government and Public Involvement in Health Bill, which I hope will be enacted shortly. There is talk about how the mechanism will work in the local area agreements, which I hope we will now see as local area and spending agreements, because the issue is all about money and how it will make a difference. Will the Minister therefore spell out how the mechanism will operate in practice?

We have compromised and we have been willing to compromise. This Bill has been one of compromise and consensus and everyone says that that is a terribly bad thing because it means that we get bad legislation that is all mushy and means warm words to everyone. However, I think that we will come out with a good Bill and this issue is at its kernel. There is healthy disagreement on a philosophical point about the degree to which we can genuinely devolve resource allocation to a local level and persuade Government that what local areas want to do is appropriate and right. If that cannot be done under this Bill, it would be good to know how it can be made to happen; otherwise, what we will have is not a poisoned chalice, but there will be a lost opportunity for local areas. When they look to carry out their functions in all sorts of promising ways, the money will not be there.

I hope that the Minister is listening to what we are saying. We are trying to work through some difficult points, but doing so on the basis of unanimity. I hope that we will genuinely learn how the mechanism can be made to operate. Local communities must understand that and, as Mr. Hurd explained, the point must be made explicit; otherwise local communities may use the mechanism in a way that some of us do not want them to. I hope that the Minister has heard that point, and he should have heard it because it was made on several occasions in Committee. I know that there is a way forward and I hope that he will explain what it is.

I make no apology for seeking a compromise even if we reach a compromise on a compromise, given that we will not press the new clause to a vote. The spirit of what we have said is important, so I shall now sit down and listen to what the Minister has to say.

Julia Goldsworthy (Shadow Chief Secretary To the Treasury, Treasury; Falmouth & Camborne, Liberal Democrat)

I do not intend to jeopardise the Bill's progress by speaking over-enthusiastically to try to ensure that local communities can participate in their own local policy making. I am pleased that the Bill has returned to the Floor of the House after a rather long and winding journey, with plenty of fits and starts, to get us to where we are today.

New clause 6 and whether we need clause 5 have been at the heart of the most heated discussions that we have had on the Bill. As Mr. Drew said, the danger of consensus is that we end up with mush and warm words. What I want to be protected is a real sense of narrative in the Bill. It is good news that the Minister has accepted clause 4 and that we will have clear reports on public spending at local level. However, something must flow from that; if nothing does, all we will do is raise expectations at a local level but fail to deliver any action. To provide a narrative and to meet the public's expectations of what the Bill can deliver, we need a mechanism to flow from clause 4.

After everything that the Minister said in Committee, we are disappointed that one of the amendments to the Bill will delete clause 5 without any replacement. I support the new clause tabled by Mr. Hurd, because we are arguing that there should be a narrative. The new clause is our suggested compromise. As I say, we do not want to jeopardise the Bill, but there must be mechanisms flowing from clause 4, and we still do not see them.

It may not be possible to resolve the problems today but, as the hon. Members for Ruislip-Northwood and for Stroud have said, we want to be sure that there is a way forward. If there is not, all that we will achieve is raised expectations. When the public see the public money that is being spent in their local area, they will push at an open door and say, "Hang on a minute. If x is being spent in this area and we don't agree with it, why don't we have a say on how it is spent?" I imagine that such pressure will be exerted, so I hope that the Minister will anticipate the problem and deal with it before it arises locally.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

Let me try to reassure the hon. Lady about what she has described as the narrative and about the consequential actions. I strongly agree with her point about raised expectations, but may I put another point into the pot? She says that she is scared of mushy compromise, and we are all scared of that. However, she is also a proponent of the view that what happens in Cornwall is different from what happens in, say, West Dorset. I do not want mushy compromise to take away the important point the Bill's promoter made: if one is a localist, one accepts differences.

Julia Goldsworthy (Shadow Chief Secretary To the Treasury, Treasury; Falmouth & Camborne, Liberal Democrat)

I absolutely agree with the Minister. We need to celebrate diversity. Business Link is a good example of that. My constituency, and Cornwall more widely, have more small businesses at micro level per head of population than anywhere else in the country. Business Link provides services across Devon and Cornwall, and even in that small area there will be a real need for a diversity of solutions to meet diverse problems.

The Minister is right. We need to celebrate diversity by finding a mechanism that allows diversity to be captured. At the moment, we have a snapshot of how central decisions have an impact on funding at local level, but no mechanism to give us a sense of what will flow from that and how local communities will be able to take real decisions. Function follows power, and that is followed by money. At the moment, that chain is broken.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

This is an important point. The power that will be unleashed by the local spending plans in what is now clause 4 and the ability of local areas to set the 35 targets that are expressed in the Local Government and Public Involvement in Health Bill will be different in different areas. There is support across the parties for putting those two things together, as that would create a powerful and, I expect, helpful tool.

Julia Goldsworthy (Shadow Chief Secretary To the Treasury, Treasury; Falmouth & Camborne, Liberal Democrat)

Again, the Minister is right. It is important that there is symmetry between this Bill and the Local Government and Public Involvement in Health Bill and that local area agreements offer a way of discussing such issues. We debated how to break the impasse in Committee. There is a danger that if agreement cannot be reached locally, progress cannot be made.

I hope that the Minister will be able to reassure us that he recognises the importance of something flowing from clause 4 for reasons of narrative and function. Although the Government have not put forward any options on that today, I hope that they are committed to ensuring that changes are made that will make sure that the important narrative of the Bill is not lost.

Oliver Letwin (West Dorset, Conservative)

I do not think that anyone in the Chamber intends to press new clause 6 to a Division. However, what we say about it will be important, as there will be further discussion in the other place. In addition, as the Bill proceeds through the other place, as I hope it will, there will be wider public discussion.

It is important that we tease out the difference of substance that my hon. Friend Mr. Hurd ably began to expose. Almost the only difference, although it is crucial, between new clause 6, which my hon. Friend tabled—it is supported by Mr. Drew and, morally at least, by Julia Goldsworthy—and new clause 1, which was tabled by the Minister, lies in new clause 6(4), especially paragraph (b). New clause 1 will allow, as would new clause 6(2), the function carried out by a public body through expenditure identified in the local report to be sought by the local authority. So far so good. The problem is that new clause 1 does not make it clear both that the money follows the function and, critically, that in the use of the money that follows the function, the local authority to which the function has been transferred should have the ability to achieve the objectives of that function via a different method from that determined for the public or central authority whose functions have been transferred to the local authority.

If that sounds like a complicated sentence, let me try to crystallise the argument in a simple example that the Minister and I constructively discussed in Committee. I said:

"a local authority might feel in a particular case that the general objective of promoting more sustainable small and growing business"—

the very example cited by the hon. Member for Falmouth and Camborne—

"would be better achieved by providing people with something completely different",

such as something completely different from what Business Link, acting on behalf of the Government, was proposing as the means of supporting local business. I went on to say:

"We want a position whereby if the business link group does not feel that the local authority is proposing the right kind of thing, then so long as the area is not defined as primarily nationally significant the local authority will have the presumption of getting the Secretary of State's approval to take over the spending."

My remarks on such matters are neither here nor there because the Minister has the power and it is what he says that matters. He said:

"I agree and would go slightly further. The best way of promoting small business in an area might be to provide a youth club for 19-year-olds... As the hon. Member for Ruislip-Northwood said, the point is the outcome...If the best way of creating small businesses is to build a youth club so that there is access to young people, which is what I want to achieve, that is desirable."

I said:

"I do not know whether this is a parliamentary term...but my response to that is 'bingo!'" ——[ Official Report, Sustainable Communities Public Bill Committee, 23 May 2007; c. 148.]

That was my response because it seemed then that the Minister accepted that we were not just talking about a power grab, whereby a local authority took over a function and carried on business as usual, albeit in its hands, but that we were actually talking about whether a local authority could decide not to spend the money the way that Business Link spent it, or the way that Business Link's remit determined that it should be spent—to put it in the terms used by my hon. Friend the Member for Ruislip-Northwood—but to spend in another way, which the local authority thought was the best way to promote local business, given the agenda of promoting local sustainable communities.

The crucial difference between new clauses 1 and 6 is that new clause 6(4)(b) precisely spells out that

"any local authority to which the functions are transferred may determine the policies to deliver the objectives of the function, having regard to the authority's own community strategy."

If the Minister is going to tell us that we do not need to spell that out because the transfer of functions allowed by new clause 6(2) or new clause 1(3) will automatically and implicitly not only allow a local authority to determine the policies to deliver the objectives of the function, but give the local authority the money to carry out the function, thus fulfilling the purpose of new clause 6(4)(a), it seems to me there will be ample room to achieve agreement in the other place on drafting that will leave that in no doubt. We do not need to do that today—we can do it later. If the Minister agrees that there will be a shift of not only the function, but the money, and that the local authority will be able to decide how that money should be spent, we can achieve agreement on the drafting anon. If, on the contrary, the Minister actually believes that new clause 1(3) and new clause 6(2) do not automatically imply that—I do not think that they do—we have a point of enormous substance between us, which we shall have to continue to discuss over the summer. If that is the case, I hope that the Minister, or his successor, will eventually change his or her mind, because otherwise the Bill's main purpose cannot be fulfilled.

If a transfer of function merely allows a local authority to be and to do exactly the same thing as the central authority was being and doing, nothing will be achieved. That will not get us to where we need to be. Given that that is the main point of the Bill, we will have to keep discussing the matter until it is crystallised in another place. The Government will have to decide whether they are for or against the aims of the Bill. What we must not have is a fudge where it looks like we have the Bill, but in fact we have a Bill that does not do the job that it is meant to do. That is why the Minister's comments about new clause 6 will be important.

Lynda Waltho (PPS (Rt Hon David Hanson, Minister of State), Ministry of Justice; Stourbridge, Labour)

I understand what the right hon. Gentleman is saying about a body such as Business Link, but perhaps he or other members of the Public Bill Committee will be able to help me with something with which I am struggling. If the community in Stourbridge decided that the local Jobcentre Plus was not fulfilling its function, what safeguards would there be to prevent the local council from charging an employment agency to take over that function? I am worried about the consequences of dismantling of the important mechanisms of state that are in place for the most vulnerable.

Oliver Letwin (West Dorset, Conservative)

The hon. Lady asks a serious and pertinent question that has been at the centre of much of our discussion as the Bill has progressed. She can be reassured—this is not a bone of contention between the Government and the rest of us—by the fact that under any version of the Bill, a local authority will be able to propose that it should spend money differently, but will not have the right to determine that it should do so. The Secretary of State of the Government of the day will be able to consider the proposal. If that Secretary of State thinks that the proposal is zany and that local people should not be able to elect a government that would do such a thing, he or she will be able to say no and that will be the end of the matter. The hon. Lady can relax, because there is no potential for monkeys to distribute peanuts instead of jobs.

However, let us say that we are talking not about a lunatic proposing nonsense, but about a genuine disagreement of view between the centre, whoever is in government, and local government, no matter what its political composition may be, about how an objective is best met. Let us take the example of employment that hon. Lady mentioned. In our version of the Bill, the local view would generally prevail. However, the Secretary of State could still battle it out and say no, if they were really determined to do so.

Let me give the hon. Lady an example of where such a process would be useful, not dangerous. In Kent, because of the local area agreement, one of the most productive things that have happened is in the field of employment. Through agreement in the local area agreement framework, the county council has taken the lead in changing some of the ways in which are people got into jobs, so that people have more sustainable jobs for longer, which has saved the Department for Work and Pensions and the Treasury benefit and tax credit expenditure. Under the local area agreement, that can be recycled into yet more efforts to help more people into sustainable jobs. That is clearly a virtuous circle on which she and I would agree.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

I am grateful for the right hon. Gentleman's comments; they are very helpful. It may reassure my hon. Friend Lynda Waltho to know that, in the Kent example, when the target is met—we can have a debate about how many targets there should be another time—there is a reward, financed through the local area agreement, to give an incentive for achieving outcomes in the jobs market.

Oliver Letwin (West Dorset, Conservative)

That is absolutely right, and it is one of the reasons why that virtuous circle was set in motion in Kent. That is a point of agreement between us. However, as the Minister would accept and as I certainly accept, the consequence of that is that there will be times and places in which the Government of the day, whoever they may be, think that the obvious way to achieve an objective is x, and the people who have been elected locally and are answerable to the local electors think that the way to achieve it is y. We are asking the Government to take the risk, although they will be able to veto the decision if they must, of leaving local people, generally speaking, to make that decision for themselves. The system will not always be perfect and it will not always produce perfect results. It will be a political risk for the locals who take that step and a risk for Government, as they will be letting go of some of their powers, but the point of the Bill is precisely to achieve that.

If the hon. Member for Stourbridge is asking whether there are safeguards, the answer is yes. If she is asking whether those safeguards will always ensure that the policy machine of the Government of the day determines the outcome, the answer is no. The effect would be that, very often, locals would get a say in how the system was operated, although the Government of the day might or might not thoroughly approve of that.

Lynda Waltho (PPS (Rt Hon David Hanson, Minister of State), Ministry of Justice; Stourbridge, Labour)

Following that, what happens if the system goes wrong? That is my concern. Whose fault would it be, who would shoulder the blame, and where would we go from there?

Oliver Letwin (West Dorset, Conservative)

It is interesting that, although we are having a debate that is deeply relevant to new clause 6 —I am grateful to you, Mr. Deputy Speaker, for letting us have it—it also relates to the centrepiece of the Bill, because the question that the hon. Lady asked is the main question raised by the Bill. What happens if things go wrong? The responsibility would be with the local authority that had caused things to go wrong and it would answer to its electorate. If she is saying, "Oh dear. The Government may allow some public money to be given, via tax, to the local authority, which may spend it in ways that fail and it may then be accountable to its population. Oh dear, dear," I would say the following to her. First—I do not say this in a partisan spirit—things frequently go wrong for Governments of all hues. I will not trouble her with the many things that have gone wrong in the past 10 years, and I hope that she will not trouble me with the things that went wrong in the years before that. Governments of all hues get things wrong, as do local authorities. Actually, Governments get things wrong on a bigger scale than local authorities, because Governments cover more ground and have more money, so when things go wrong for Governments, they very often go wrong more comprehensively.

Secondly, a local authority that goes wrong is pretty directly answerable to its people, in the sense that they can see what it has done locally. Thirdly—and this is the guts of the whole theory and culture of the Bill—until and unless we are willing to say that local people should be able to make their own mistakes, and should be answerable to their local electors when they make those mistakes, we will not ensure that our population is seriously engaged in local democracy and local participation. It is because of the hon. Lady's fears that Governments of various persuasions have for many years fought shy of giving local people real control. As a result, local democracy has become less and less effective and participatory. The Bill seeks to change that, and that is actually in tune with the Government's general objectives. That is the effect that the Minister is trying to achieve, as he has frequently said in debates on his other Bills. We are saying that the single most important thing that we can do is to achieve that effect by giving locals real power of the purse, and that is what the provisions seek to do.

My last point is that I hope that the Minister will at least make it clear which side of the line he is on. Is he saying that we have misunderstood, and that his new clause 1(3) does the work of the whole of our new clause 6, including subsection (4), in which case we are simply talking about a drafting issue, which we can resolve in another place, or is he saying that our new clause 6(4) is not acceptable to him, because it does more than new clause 1(3)? In that case, we have a point of substance to resolve in another place. It would be really helpful to know which of those situations we will be dealing with in the coming months.

Philip Davies (Shipley, Conservative)

First, may I formally congratulate my hon. Friend Mr. Hurd on introducing a Bill that gives more power to local people—something that I believe is immensely important? Like my right hon. Friend Mr. Letwin, I think that new clause 6 goes to the heart of what my hon. Friend the Member for Ruislip-Northwood is seeking to achieve.

I support my hon. Friend's Bill and his new clause, but I would like to explore in a bit more detail some of the contradictions in the Bill, because as Mr. Drew has said, it is a compromise, and there has been an attempt to ensure consensus. I am not quite as big a fan of consensus as the hon. Gentleman is. Someone—I am struggling to remember who it was—once said, "My father taught me the value of consensus; there is no value in consensus", and I endorse that quotation wholeheartedly. Most of the biggest disasters in political life have been brought about through all-party consensus, so, unlike the hon. Gentleman, I am a bit more doubtful about its merits.

The difficulty with the new clause—and with the Bill, to a certain extent—is how much power it gives to local people and local authorities. I support the determination of the leader of my party, my right hon. Friend Mr. Cameron, to ensure more localism. I endorse that aim. The one problem with the new clause and the Bill is that we are still investing an awful lot of power in the Secretary of State. I agree with my right hon. Friend the Member for West Dorset that true localism is about giving real power to local people, and perhaps even allowing them to make their own mistakes from time to time, but within a democratic framework, so that if people do not like what the local authority is doing, they can vote it out at the local elections. If people had some real power, there might be higher turnouts at those elections.

Julia Goldsworthy (Shadow Chief Secretary To the Treasury, Treasury; Falmouth & Camborne, Liberal Democrat)

The problem is that many of the powers that we want to devolve are held by a Minister or the Secretary of State. We cannot simply take those powers off them by revolution; there must be some degree of consent. That is why there is a need to co-operate with the Department—unless the hon. Gentleman is proposing revolution, of course.

Philip Davies (Shipley, Conservative)

The hon. Lady may have noticed that I am a Conservative and I do not believe in revolution. My hon. Friend Mr. Howarth once said that if it is not necessary to change, it is necessary not to change. That is a sentiment that I tend to endorse.

I accept the point that the hon. Lady makes. The tension in the Bill is that we all want to see local authorities and local people being given a greater say in what goes on locally. That tension is partly illustrated by the points made by Lynda Waltho when she asked about the safeguards if much more power were invested in local authorities. I would not like to see the new clause or the Bill being used by some overbearing local authorities to start empire building and adding to their role.

I would like to see power devolved from national Government to local government, from local authorities to parish councils, and perhaps also from local authorities to the voluntary sector and the charitable sector. I want to see power going one way—down, with no scope for power to go up. That is the thrust of what my hon. Friend the Member for Ruislip-Northwood is trying to achieve in the Bill and why I welcome it so much. I would not like to see—the point that the hon. Member for Stourbridge was making—councils empire-building and taking on additional functions that could be done better at an even more local level. That was a fair point.

Anne Main (St Albans, Conservative)

My hon. Friend is pointing out some of the merits of the Bill and perhaps some of the drawbacks. One of its huge merits is that the Bill has opened up a debate on what is sustainable. Part of the problem is that local authorities have had "sustainable" stuck in front of many of the policies delivered to them, have been expected to implement them and have had very little say over how sustainability works locally. I welcome the Bill because it allows local people to have an input into what is going on in their area, instead of being told prescriptively how they must do things.

Philip Davies (Shipley, Conservative)

I agree. As usual, my hon. Friend is right about that. We would all like local people to have a greater say in what happens in their community.

One of the topics that I wish to explore through new clause 6 is the potential for local authorities to free themselves of some powers and hand them down to parish councils. I have a number of parish councils in my constituency. I should declare an interest. My wife, Debbie, was recently elected to Baildon parish council when it was newly formed earlier this year. I would not want anyone to think that I was trying to empire-build for my wife. She has enough power at home, without building on her powers in the local community.

There is great value in local authorities giving up some powers and handing them down to parish councils, which are the bodies most closely linked to the local community. Their members have a vested interest in the sustainability of their local village and their local community, and are usually best placed to know what should be done to further that. I hope my hon. Friend, the promoter of the Bill, will confirm that he would like to see the new clause being used to help parish councils gain more powers from the local authority.

Nick Hurd (Ruislip - Northwood, Conservative)

My hon. Friend may take some comfort for the thesis of his speech. Clause 3(3) puts in place a mechanism to ensure that the voice of parish councils is heard in the formulation of recommendations by local authorities to the Secretary of State for input into a national action plan for sustainable communities. The thrust of the Bill is that in formulating a response to community breakdown and promoting the development of more sustainable communities, the strategy to counter social problems must be driven from the bottom up. Specific mechanics are in place to ensure that that can start with parish councils.

Philip Davies (Shipley, Conservative)

I thank my hon. Friend for that helpful and reassuring intervention.

New clause 6 and the Bill as a whole can help with the worrying lack of involvement locally. Not only turnout for local elections, but the number of people putting their names forward for election to parish councils, for example, have gone down. The Minister will recall that we had a lengthy discussion about the role of the Standards Board in that. If we can give parish councils more decision-making powers over what happens in their village and their local community, more people would want to get involved in parish councils and to join in events in the local community.

Greg Knight (East Yorkshire, Conservative)

Is not the problem something for which we cannot legislate in the Bill—that councillors on district and county councils are often unwilling to see powers go from the authority on which they serve to the parish council, when they should be standing up to their officers and arguing for the power or function to be devolved?

Philip Davies (Shipley, Conservative)

My right hon. Friend goes to the heart of the issue. He is right. Local authorities often wish to empire-build, as we saw in the debate on district councils and unitary authorities. Often, the bigger council wants a unitary authority because it would have more power, and it has difficulty handing powers down.

My next point concerns the role of the Secretary of State. It is always Opposition parties that want Governments to give up power, but when those parties get into government, they often forget that and think it essential that they hold on to those powers because they will use them better than the previous Government. The Bill invests an awful lot of power in the Secretary of State, and contains no guarantee that local authorities will get more power from the Government or that local people will have more say. To a certain extent, it is at the whim of the Secretary of State whether that is allowed to happen. I have great respect for the Minister, and I believe I speak for the whole House when I say that. I have no doubt that he would be prepared to give more powers to local people, but we are still at the whim of any—

Oliver Letwin (West Dorset, Conservative)

I hope my hon. Friend will accept that it is not quite a question of whim. A Secretary of State who is faced with the situation in which local people can see how the money is being spent, and who then resists local plans to spend it better, faces a certain political penalty in the area if he or she rejects the local plan or local proposals. I hope my hon. Friend will recognise, therefore, that there is a mechanic in the Bill that is politically and practically quite powerful.

Philip Davies (Shipley, Conservative)

My right hon. Friend makes a fair point. I very much hope that that is the way the Bill will work, but there is still a tension. We need a Secretary of State who genuinely believes that local people know best about what happens locally. I flag that up, although I accept the point that my right hon. Friend makes.

My final point relates to the character of the Bill. I was slightly concerned by what all the previous speakers have said. My hon. Friend the Member for Ruislip-Northwood said that new clause 6 was a compromise and was not as radical as clause 5. The hon. Member for Stroud said that it was a compromise on a compromise, and the hon. Member for Falmouth and Camborne touched on the matter as well. There seemed to be a feeling that the Government were trying to water down—that was the phrase that my hon. Friend used—the effect of the Bill.

That surprised me, as my understanding in Committee was that the Minister gave assurances on a number of occasions that the Government support the Bill, despite voting against it on Second Reading, and would not attempt to water it down. Will the Minister tell us whether his opposition to new clause 6 or the Government amendments are an attempt, even a minor one, to water down the Bill? Many people in my local community and many hon. Members would be worried if that was the Government's intention. Many representations have been made to me locally about how important the Bill is. Much of the correspondence that I receive relates to things that are important to the local community rather than international or national events. I hope that the Minister will not attempt to water down the Bill, which is important for the future of local government and the maintenance of participation in local government and on parish councils. It is important to make sure that everybody in our local communities feels that they are part of what is being decided in their local areas.

Greg Knight (East Yorkshire, Conservative)

With new clause 6, we are also debating Government amendment No. 22. Can my hon. Friend think of any reason why the Government would want to delay implementation for 18 months?

Philip Davies (Shipley, Conservative)

My right hon. Friend is as eagle-eyed as ever. His contributions are always valuable, because he notices things that other hon. Members miss. The honest answer is that I do not know the Government's motivation in tabling that amendment. I have no doubt that the Minister will seek to tell the House exactly why amendments Nos. 22 to 25 are so important. I hope that he will reassure the House that their purpose is not to water down or delay the Bill.

Like my right hon. Friend the Member for West Dorset, I think that new clause 6 goes to the heart of the debate. It is essential for local democracy, local participation in democracy and people's faith in the political system that we respond to what people want locally, and I therefore support new clause 6. If the Minister is not prepared to support new clause 6, I hope that he will think again and reflect on how important it is to our local communities.

Anne Main (St Albans, Conservative)

I support the Bill because local people feel impotent and frustrated. Most of us accept that impotence is frustrating, but it concentrates the mind wonderfully at a local level—I look to hon. Members to support that statement.

Local people say, "What is the point in voting when we have so little say over changes in our community?" They feel that so much has been directed at them from on high, and if we can repatriate that feeling of control over the shaping of local communities, they would be a lot happier because they would be much more engaged. People who are involved in local communities, charities and directing good works turn up regularly to events, but they have so little say. If people turn up and present their view, they feel that it is ignored. That situation cannot continue, which is why I welcome the Bill. New clause 6 would provide some clout at a local level.

People are heartily sick of being dumped on. In my community, we have problems with road noise. People were promised whisper-quiet tarmac, but four or five years down the line, the promise was dumped and nobody heard anything more about it. If the local council had been able to say, "Here is the money. It will be used for that," repatriating control to a local level would possibly have meant that my constituents in Bricket Wood would not be complaining like mad about the state of the roads and road noise.

We should consider environmental sustainability and not just tack it on as a word in front of everything that we do. I want to give the Minister an example of the frustration that local people feel. People feel that they have no control over planning at a local level, because alterations to planning law mean that what the Government say must be implemented. I am sure that this example is not an isolated incident and that similar events have occurred in other constituencies. Only three weeks ago, planning permission was granted for a block of 12 flats with one parking space, which is simply for disabled parking, so that block of flats has no parking spaces. That supposedly makes the block sustainable within planning policy statement 6, which states that parking does not have to be provided in a sustainable location. Local people had their say, but they could not effect a change. If they had been given the control to put in extra transport or extra facilities, they might have accepted that the block was sustainable, but they feel that they have been given more clutter on local roads.

The situation cannot continue. I am very concerned about environmental sustainability. I participated in an Adjournment debate on housing totals for Hertfordshire—the Minister was not present—where I pointed out that sustainable communities should be environmentally sustainable. Local people feel that they have much to contribute and that they have been ignored. The Government have not conducted any environmental capacity studies on the Hertfordshire housing totals that have been imposed on us. Anecdotally, local people feel that they can tell the Government much about the state of the M25 and the roads around our area. They can tell the Government what we need to deliver those housing totals, should we have to deliver them. It is worrying that we are given those things to deliver but have little say about how we will deliver them and the impact on our communities. If the Bill means that we will have some say, some control and a way of shaping our community and not just delivering what the Government want us to deliver, then it will be all to the good.

Like many hon. Members, I have some concerns about whether there will be failures under the Bill. However, it is the nature of our belief, as Conservatives, that it is no good saying to people, "Yes, you can have choice. Yes, you can shape your place. Yes, you can determine your community. However, if we think that you are doing it wrongly, we will quickly whip those powers off you and tell you what is best." Many of my hon. Friends and I do not subscribe to the nanny state, and I know from my postbag that many of the public do not, too.

People do not have a political motive when they write to me and say, "We are sick of being dumped on. We are sick of being told what we have to do." The fallout is that people do not vote and do not attend council meetings. I have been a parish councillor and a district councillor. I remember packed parish meetings, where people debated small things happening in a village. Those people cared about that place and had a sense of place and community that meant that they genuinely cared. Such people would not spend money irresponsibly, and if a parish council or district council were to do that, the council would, as other hon. Members have said, be booted out. The best way to establish accountability and to relieve impotence and frustration is for people to go up to their local councillor and say, "This is what I value in my community."

Lynda Waltho (PPS (Rt Hon David Hanson, Minister of State), Ministry of Justice; Stourbridge, Labour)

I accept what the hon. Lady has said about parish issues and constituency issues. On employment, however, Government targets and Government policy have meant the virtual eradication of long-term youth unemployment in Stourbridge. The targets in the Jobcentre Plus and new deal policies made that happen in my constituency. I am worried that such Government mechanisms, which are fed by Government policy, would be dismantled, in which case Stourbridge might become an unemployment blackspot.

Anne Main (St Albans, Conservative)

I accept the hon. Lady's concern, but I have a higher opinion of my local area. We have very low unemployment in St. Albans, but it would be foolish maliciously to break up something that works for the good of the community. Surely this is about our taking the best practices from other areas, examining them and implementing them in our own areas. We should value what we have got that is good, but we should not be told how to do things, which is what we want to move away from.

Lynda Waltho (PPS (Rt Hon David Hanson, Minister of State), Ministry of Justice; Stourbridge, Labour)

I am not suggesting that such action would be malicious. I am just going on my constituents' experience of Dudley council. The thought of Dudley council being in charge of anything to do with employment would fill my constituents with horror.

Anne Main (St Albans, Conservative)

The hon. Lady obviously knows her council better than mine. My council is not Conservative run, and I am talking about councils generally. I believe that most councils, of whatever political hue, genuinely want what is best for their local area. I am not being at all political about this; I have no wish to know about the politics of the hon. Lady's local council.

I accept that there are some bad councils—we have all experienced them—and some duff councillors. I hate to say it, but we all have duff councillors on our councils, and that is because they have so little power. What would encourage anyone to work in a local council as a councillor—

Greg Knight (East Yorkshire, Conservative)

On a point of order, Mr. Deputy Speaker. I am sorry to interrupt my hon. Friend. According to the press today, the National Audit Office is saying that hundreds of thousands of homes and businesses are at risk of flooding due to the fact that the Environment Agency has failed to maintain proper flood defences. At the same time, the Met Office is saying that parts of Yorkshire and the midlands could be at the risk of flooding this very weekend. Have you, Mr. Deputy Speaker, received notice from the Environment Secretary that he intends to come here today to make a statement on this very important matter? Should not he come to the Dispatch Box to tell us what he is going to do about the incompetence of the Environment Agency and what action he is going to take to prevent many hundreds of thousands of people from facing the misery of having their homes flooded?

Michael Lord (Deputy Speaker)

I have no knowledge of the matters that the right hon. Gentleman raises, certainly not the most immediate news that he has given to the House. The points that he has made are on the record. They are not a matter for the Chair, but no doubt those on the Treasury Bench will have heard them and will convey them to the appropriate quarter.

Anne Main (St Albans, Conservative)

We all have councillors of various abilities on our councils. As my hon. Friend the Member for Shipley said, we struggle in some areas to get people to stand as councillors. Many people ask us what is the point of being a councillor when they have so little control over what happens in their local area. The Bill would mean that people with business acumen and all sorts of strengths would start to be more engaged in their local council because they could start really to shape the community in which they live. That would be a good consequence.

Philip Davies (Shipley, Conservative)

I entirely endorse what my hon. Friend says. Would she go slightly further and say that the other benefit of the new clause and the Bill would be to increase accountability? When my constituents have a complaint that I take up with the local authority, it often says that there is nothing that it can do about the matter because it is prescribed by the Government. When I then write to Ministers, they say that it is nothing to do with them and for the local authority to determine. We often find that there is no local accountability whatsoever. If the powers were clearly handed to a particular local authority or function, there would be increased accountability as well as increased participation.

Anne Main (St Albans, Conservative)

My hon. Friend makes a valuable point. Councils often recite the argument that they are officer led, not member led. The officers recommend that they should do something, and so, sheep-like, they all go ahead and do it. We hear that particularly often in relation to planning. That is frustrating. We should have member-led councils elected by, responsive to, and directly accountable to the people whom they serve.

Richard Benyon (Newbury, Conservative)

Does my hon. Friend agree that one of the recent innovations that has been to the advantage of local accountability has been the formation of parish and town plans? That has allowed a wider group of people to get involved in deciding what is wrong in local communities, not just the usual suspects who get involved in parish politics, such as the wife of my hon. Friend the Member for Shipley in a "Vicar of Dibley"-like scenario. [ Interruption . ] I was not disparaging my hon. Friend's wife at all, but suggesting that sometimes the framework of parish councils means that more people need to get to grips with what are the problems in the community and finding solutions to them.

Anne Main (St Albans, Conservative)

rose—

Michael Lord (Deputy Speaker)

Order. The hon. Lady may of course respond to that intervention in her own way, but I am anxious that we should not develop this argument too far; we are after all discussing new clause 6.

Anne Main (St Albans, Conservative)

I shall be brief, Mr. Deputy Speaker.

As somebody who has been involved in two parish plans, I suppose that I must be "Vicar of Dibley" mark 2. My hon. Friend makes a valuable point. When I was involved in parish plans, we asked local people questions and tried to formulate a draw-down mechanism to ensure that funding went to what they wanted. In the case of the Colney Heath parish plan, we knew that there was a dearth of play equipment because we had talked to local people and that is how they wanted the funding to be spent. New clause 6 is a bigger version of that. It would ensure that people were asked what they wanted and prioritise funding to go to those particular projects. Bringing back that deal of control and giving people a say and an input would be all to the good and has my full support.

Philip Hollobone (Kettering, Conservative)

I support new clause 6. I should like to draw to the Minister's attention a possible early application of the Bill were it to pass into law. In the borough of Kettering, we have a particular problem with parking in the town centre. For many years, that has been the responsibility of the local police. The local police do many wonderful things in catching criminals and bringing them to justice, but it is fair to say that they have not had a terribly strong record on parking enforcement. Indeed, if I tell the Minister that Kettering currently enjoys the services of just one traffic warden who is now largely funded by Kettering borough council, as opposed to the police, perhaps he will realise the extent of our problem. This extends to the whole issue of the decriminalisation of on-street parking enforcement.

For years, throughout the country, local police forces have been given the responsibility for enforcing on-street car parking. They have not been doing it properly, and local councils have taken up powers to undertake those procedures themselves. However, I am not aware that in Northamptonshire the moneys that the local police were meant to be spending on parking enforcement have in any sense been transferred to the local authorities that have taken on those responsibilities. In Northamptonshire, the county council has now taken responsibility for on-street parking enforcement for most of the district areas in the county—but not, I am happy to say, in Kettering. I serve as a borough councillor in Kettering, and we are going to try to hold our ground. In our view, on-street parking enforcement would best be done by the borough council, which is fully aware of the needs of local people, local sensitivities and the particular issues that arise. Northamptonshire county council has many good qualities, but I am afraid that being aware of the particular local sensitivities of people in Kettering with regard to traffic issues is not one of them.

Kettering borough council does have responsibility for off-street car parking and raises a considerable amount of local revenue from that. In our view, it would make sense to put on-street parking enforcement together with off-street parking enforcement and run an incredibly efficient town centre parking enforcement operation. That would be to the benefit of residents and shoppers in the town because it would help to create a new vibrancy in the town centre, which is plagued by many different parking difficulties. If the Bill becomes law, there could well be an early application from Kettering borough council, having consulted the local police and the county council, to take over on-street parking enforcement in Kettering borough. If that were the case, as the local MP I would want to draw that to the attention of the Secretary of State and urge him or her to approve that application.

At the moment, the mechanism whereby Kettering borough council can advance its cause is not clear to me. It is locked in a dispute with the county council that will be difficult to resolve, despite the fact that on many issues, at a local level, there is a lot of good will between the two local authorities. That is best evidenced by the recent discussions locally about the Government's intention to try to bounce the people of Northamptonshire into a unified local authority, which I am pleased to say local councillors at borough, district and county levels, after much debate and discussion, universally agreed to reject in favour of enhanced local co-operation at three levels of local government—the county council, the district and borough councils, and the parish councils.

I believe that the enhanced local government network initiative in Northamptonshire will be one of the leading lights in the country for the way in which local authorities deliver their services effectively to local people. A good example is the customer service centre at Kettering borough council in the middle of the town. A local resident who goes to the customer service centre is not immediately aware of which local authority runs that centre, which is a joint initiative between the county council, Kettering borough council and other local agencies. That well run centre aims to ensure that the local resident who turns up asking for a local service gets what he or she wants in the quickest possible time. There is no particular pride in ownership—all the local councils agree that that resident should be served as quickly and helpfully as possible.

I use the opportunity of the debate to flag up to the Minister for Local Government that I hope that he accepts the new clause and that the Bill becomes law. If the Bill does become law, I hope that an early application will come his way from Kettering borough council to try to resolve the local parking problems.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

I congratulate the sponsors of the Bill and especially the promoter. Mr. Hurd again spoke eloquently about his Bill. He has shown great skill and gone out of his way to be consensual. I shall comment on Philip Davies shortly. I thank Julia Goldsworthy and my hon. Friends who served on the Committee.

The Committee was unusual for the hon. Members who served on it and for me as the Minister who responded on behalf of the Government. I sat on the Front Bench with my fantastically loyal Parliamentary Private Secretary, my hon. Friend Lyn Brown, whom I also thank, and without a member of the Whips Office to look after me and keep me on the straight and narrow. I now welcome the presence of the Whips, who bring certainty and provide gentle reminders of when one is straying beyond Government policy.

The experience was also unusual for another reason. I appreciate that it is not normal to mention civil servants and I hope that you, Mr. Deputy Speaker, will not mind my paying tribute to them. It is difficult for Government officials, who worked extraordinarily hard for me, my team and the Committee, to work outside Government policy. When dealing with a private Member's Bill, one inevitably has to adapt policy to meet objectives sometimes by the hour during the course of deliberations. There has been no lack of willingness to help the Minister. Officials have gone through the proper procedures of Cabinet Government to get Government clearance and rightly abided by the advice of parliamentary counsel, which is independent. Ministers are obliged to act on the advice of parliamentary counsel. If that were not the case, we would politicise the law and make bad law.

I am now delighted to report to the House that I have Government clearance and parliamentary counsel advice to support the Bill. It is the Government's policy that it should reach the statute book. I give those assurances not only to hon. Members who served on the Committee, but to my hon. Friend Mr. Dismore, who is not in his place, but who is promoting the next Bill that we will discuss. I wanted to stress to him that it is Government policy to support the measure that we are considering.

I ask hon. Members not to accept new clause 6 but to adopt new clauses 1 and 2 instead. I can give Mr. Letwin the assurance that he needs and has requested. Our advice is that we can achieve the intention of new clause 6 on function, money and a proper process following the spending report and other matters better through new clauses 1 and 2 than through new clause 6. The problem is not, therefore, one of principle.

Roger Williams (Shadow Minister (Rural Affairs), Environment, Food & Rural Affairs; Brecon & Radnorshire, Liberal Democrat)

I support the principles of new clause 6, but could the Minister comment on the applicability of the new clause—and, indeed, the whole Bill—to Wales? Although it states that it is an England and Wales measures, a Library research paper on the Committee stage states:

"The Bill is now intended to apply to English local authority areas only."

When did the change occurred? Hon. Members who served on the Committee were unaware of that change.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

Let me revert to that point later so that I can give precise guidance. [Laughter.] Hon. Members should not get over-confident. I am not dealing with that aspect of the Bill at the moment. There is a serious point that relates to the power-making orders under the new procedures for Wales, not to what is going on in Cardiff, in case the hon. Gentleman is worried. However, I shall shortly spell out the exact process that we wish to follow.

Let me comment on hon. Members' points before dealing with the substance of new clause 6. If you will give me leeway, Mr. Deputy Speaker, I should also like to mention the objective of new clauses 1 and 2 and amendment No. 25, which would delete clause 5, because, although I appreciate that we are debating new clause 6, there is a direct interrelationship between those amendments. I shall be as strict as I can.

Let me repeat my praise for the Bill's promoter. When I had been elected for as long as the hon. Member for Ruislip-Northwood, I did not have the knowledge, gumption or courage to pilot a Bill and engage in the way in which he has done. Indeed, I spent most of my first two years in this place trying to find my locker, which I had been allocated on the first day. Even now, I cannot remember where it is. However, I sincerely congratulate the hon. Gentleman and I believe that he has a distinguished career ahead.

I hope that my hon. Friends will not report me to the Whips Office, but I also wanted to praise the hon. Member for Shipley, who is a proper Tory and a proper Yorkshireman. I genuinely believed that he would say that the law should be different in Yorkshire. However, I then realised that he was probably more interested in Shipley than in those strange people in places such as—

Philip Davies (Shipley, Conservative)

Lancashire.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

I was going to say Keighley, never mind as far away as Lancashire.

To put the record straight, the Government did not oppose Second Reading.

Philip Davies (Shipley, Conservative)

indicated assent.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

I am grateful for the hon. Gentleman's acknowledgment of that. I did not have the collective agreement that we enjoy now, but we did not oppose Second Reading.

The hon. Gentleman also made a point about parishes. I assure him that not only the Bill but the Local Government and Public Involvement in Health Bill and other measures give more power to parishes. Parishes will be given the right to pass byelaws. At the moment, the Secretary of State, acting on the advice of a Minister, passes byelaws for parishes. That is an example of a power that we do not want. I did not join the Labour party at 16 to determine whether the civic hall in Fleet in Hampshire should have a new front door, yet I have been asked to make that decision. It is wrong; we should devolve those powers.

Secondly, there is the power of well-being for parish councils. As the hon. Gentleman acknowledges, the size of parish councils can vary significantly. However, when they have the power of well-being, which principal local authorities have, it will significantly increase what they can do locally, because they will be given a statutory right to look after the well-being of their area and make proposals to improve matters. That turns upside down the legislative framework in which they operate. At the moment, they can do only what we tell them, but in future they will be able to do what the heck they want, as long as it is not against the law.

Greg Knight (East Yorkshire, Conservative)

The Minister is rightly identifying the vital role that parish councils could play in the process. I understand that this country is unique in the European Union in having parish councils. Will the Minister confirm that the Government have not entered into discussions with any of our European partners to abolish parish councils?

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

Yes. I am trying to think of which of my colleagues may have done so.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

I hear my hon. Friend telling me not to go there. It must have been confusion between the word "commune" and "communist" that led me to speculate on which of my colleagues might have had those leanings earlier in their lives.

Over a number of years, Government policy has been to improve the powers of parishes, because quality parish council schemes, village plans and now the new measures are all important. Parishes—not just for rural and semi-rural areas, but wherever they are wanted—are part of our policy. I can give the right hon. Gentleman the assurance that he seeks. In fact, we have a lot to learn from France and its system of communes, but I suspect that the right hon. Gentleman would not want local council leaders to be appointed by the central Government.

The hon. Member for Shipley, as well as informing us about the parishes in his area, was fearful that, in asking the House not to adopt new clause 6, I would be attempting to water down the provisions. My central purpose this morning, however, is to convince the House by argument and by my policy proposals that, far from watering down the Bill, I am trying to strengthen it. The Bill has an important interrelationship with the Local Government and Public Involvement in Health Bill, and indeed will strengthen it. That is my evidence that, far from watering down the provisions, I am laying down some cement.

Philip Hollobone (Kettering, Conservative)

On that interesting point, did the Minister give any consideration to including the contents of this Bill within the Local Government and Public Involvement in Health Bill and then using Government time to advance the cause?

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

Yes, but of course the success of the hon. Member for Ruislip-Northwood in gaining first place in the ballot was not known when the Queen's Speech was compiled. Throughout the process, however, my and the Government's objective has been to use the Bill in a positive and constructive way. Given the widespread support either for the Bill or for the idea behind it, I have wanted to use—use in the best sense, not abuse—the momentum to draw attention to some of our policies.

Clause 108, which is now clause 139, of the Local Government and Public Involvement in Health Bill is, in my view, one of the most important statutory measures for local government since the second world war. However, nobody other than me had even heard of it before the Local Works campaign put full-page adverts in the papers to draw attention to the significance of clause 108, so there has been a coming together. I must move on now.

The hon. Member for Shipley also talked about devolution, arguing that political parties argue for it in opposition, but keep power centrally when in government. To be fair, the Government have a reasonable record on devolving powers. This Bill does not apply to Scotland because we have devolved power to Scotland. Some of my colleagues may well think that in the light of recent changes there we should not have done so, but that is devolution—we have to trust the people. Our framework for local government has sometimes been criticised for being over-centralised, but it has improved the position and we are now in a genuine period of devolution. That is not beginning with the legislation before the other place, as other measures have preceded it. We have devolved powers and, as I have said, I believe that English councils should be the next part of the country to which significant powers should be devolved.

On a lighter note, the hon. Member for Shipley said that he feared that my Secretary of State might act on a whim. Let me assure the hon. Gentleman that my right hon. Friend Ruth Kelly never acts on a whim. She has given me full support in respect of this Bill. Given the processes of decision making in government, it would not have been possible to have acted as quickly without it. The hon. Member for Ruislip-Northwood said that he thought that progress on his Bill had been very slow at times and apologised for it, but believe me, in comparison with Government decision making, this has been quick. As to the argument that progress requires a Secretary of State who is genuinely devolutionary, it is important to note that history often reveals different views on different Secretaries of State, but in any event, this Bill locks in the devolutionary powers, which is one of the reasons why we welcome it.

Anne Main was concerned about what many of us are concerned about in the modern world: the involvement of local people and the feelings of frustration over the absence of it. All the evidence is that giving more information, providing greater transparency and facilitating a greater degree of participation are positive developments, but whether or not the public then choose to use that is, in democratic politics, a matter for them. We politicians would like everyone to vote and everyone to turn out at meetings and be as interested in politics as we are, but I am really not sure whether I would like to live in a country where that happened. I want people to have the opportunity to take part; I do not want to compel them. I recognise, of course, the frustration that the hon. Lady described. A little later, I shall point out some of the contradictions in what she said, but may I assure her that I strongly believe that clause 139 of the Local Government and Public Involvement in Health Bill—which provides for a duty to inform, consult and involve people and organisations—will, along with this Bill, help to change the situation.

Julia Goldsworthy rightly keeps reminding us about raised expectations. I am sure that the hon. Member for St. Albans would agree that part of the frustration she describes comes from the fact that if people attend a meeting and think that they have taken a decision that subsequently does not materialise—either because it was a false promise, because the power to do it was not available or for disingenuous reasons—they will not turn out to meetings again. We all have to try to change that.

Anne Main (St Albans, Conservative)

On that very point about the frustration felt when a decision taken does not materialise, I am sure that the Minister will agree that part of the problem comes from the fact that the decision is often moved higher up into government through an appeals system. That is often where the decision is overturned, which is why local people have such a huge sense of frustration. If we could move the power lower down, that is where happiness would lie in my constituency.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

On the whole, I agree with the hon. Lady, but as a planning Minister I have to act within the law and within the independent advice that I am given from the planning authorities in order to be fair to everyone. I can give the hon. Lady some encouragement in that the changes made to the code of conduct take away some of the fetters on local councillors that prevent them from speaking about planning. The restriction of the activity of local councillors came about more through case law than through planning law. The code of conduct is addressing that point. Some of the issues dealt with in the planning White Paper will also help towards meeting the hon. Lady's point.

I cannot comment on the hon. Lady's particular example, but I am more than willing to look further into it for her. On the face of it, it seems that it could fall outside the planning guidance, but I should not give any commitments. However, she cannot say on the one hand that we all want an environmentally sustainable future and then say on the other that we want more car parks. We need a policy that recognises that difficulty— [Interruption.] I was going to ask for your help there, Mr. Deputy Speaker, but the hon. Lady has seen sense.

The issue of road noise and the need for tarmac was also raised. I presume that that is a county matter. It is also a matter of money, and the issue of who pays is relevant. We all know, as elected politicians, that the public want to have their cake and eat it. They want low taxes and improved services, and I understand that—

Justine Greening (Putney, Conservative)

rose—

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

Oh, I have opened up a can of worms now.

Justine Greening (Putney, Conservative)

The Minister appears to suggest that spending more is the only way to improve services. Anyone who has spent any time in business will know that when things are run better they tend to cost less.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

I did not mean any slight by saying that I had opened up a can of worms. I have also invited an accountant into the debate. I agree with the hon. Lady. The Gershon policy of recycling money to the front line through efficiency savings proves her point again, if it needed it. If one does things more efficiently, one gets better value for money, achieving both objectives of improved public services and taxes that are as low as possible. A devolutionary policy, in which joining up is done locally—because it cannot be done perfectly from the centre—will give us better value for money.

I would add a third point, on which I am sure we will all agree, that better information and transparency will also lead to improvement in public services. The research evidence from the Audit Commission and elsewhere backs up that point.

I do not wish to get into a philosophical debate, much less an accountancy one, but I was trying to make the point that sometimes, as an elected politician, one has to say that money does not grow on trees and that we cannot afford to do everything.

The hon. Member for Ruislip-Northwood and the right hon. Member for West Dorset have asked substantial questions about the Government's attitude towards new clause 6 and new clauses 1 and 2. It may be helpful to the House if I briefly deal with amendments Nos. 22, 23 and 24. Mr. Knight asked why we wished to put in the 18 months' limit. My intention is to provide the reassurance that the Committee requested of a set timetable for implementation. That time limit is workable, and it gives the assurance to the Committee and now the House. The purpose of amendment No. 22 is to provide a timetable to ensure that arrangements for the production of local spending reports are made in a timely fashion.

Greg Knight (East Yorkshire, Conservative)

I am grateful to the Minister for that explanation. In the spirit of the speech that he is making, will he confirm that he will regard 18 months as the latest possible date, rather than the date that he intends to use? In other words, if he can do it more quickly, will he do so?

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

That depends on what happens in 12 days' time —[ Laughter. ] Let us get the legislation through before then. The answer is yes, because we want the arrangements in place before then. That will also ensure that the relevant provisions of both Bills—this Bill and the Local Government and Public Involvement in Health Bill, if it meets the approval of the other place—include a sensible timetable for coming into force, so that we get the best of both worlds. That will also avoid confusion. Local authorities often make the point that different commencement dates cause confusion and can be self-defeating. By taking that date, I can introduce a package of measures from both Bills, and I am grateful for the support of the members of the Committee on that point. Amendments Nos. 23 and 24 are consequential on amendment No. 22.

I was also asked why provision for accountability to Parliament was not included in new clause 6. The accountability to Parliament and the measures that flow from that are included in new clause 3(3) and I hope that that is to the satisfaction of the members of the Committee. If Parliament is not informed, the accountability does not follow.

With your permission, Mr. Deputy Speaker, I wish to refer to new clauses 1, 2 and 3. The point has been made about what was described in Committee as the narrative. There must be something that flows from the local spending reports and the other measures. Unfortunately for me, my proposals come in the Bill before new clause 5, but my argument is that coherent legislation is more important than my ability to understand my speaking notes—as the right hon. Member for West Dorset teased me in Committee. I hope that I can convince the House that the narrative is fully in place.

The Government have proposed measures as a replacement for the existing clause 5, which itself replaced the original clause 5 that we debated on Second Reading. Oppositions often accuse Governments of giving the "not invented here" reason for opposing amendments. New clauses 1 and 2 were invented by the Committee, in that the policy and the sentiment were taken from the Committee, translated by me into instructions to parliamentary counsel and given back to me. Although those new clauses are in my name, I see them as the proposals from the Committee's deliberations. My reason for asking the House to agree those clauses rather than new clause 6 is not, I assure the right hon. Member for West Dorset, because I did not invent it.

New clauses 1, 2 and 3 will strengthen the core measures in the Bill by encouraging local people to make proposals that go to central Government, about what the Government can do to help them sustain their local community. They will codify and set out that process, so that in the same way that the Local Government and Public Involvement in Health Bill codifies the right of the citizen and the local councillor to have a process by which the council and its partners must respond, this Bill will provide the right of local people, through the local authority, to have a process by which the Government must respond. The role of the selector will assist that enormously. Tasking the Local Government Association with that role will add transparency and order to that process.

The provisions also require local authorities to consult representatives of local people, including under-represented groups, if they choose to make proposals. I have included that point in the Bill at the request of the Committee to provide reassurance that that is the case. The provisions also introduced what I have described as new consultation plus, which will require the local authority to try to reach agreement with the representatives. Concern was expressed in Committee that what is now clause 139—it was clause 108 of the Local Government and Public Involvement in Health Bill—was not strong enough, so we have tried to strengthen that.

The provisions also require the Government to appoint a body—in practice, the Local Government Association—to present them with a shortlist of proposals, also with the new consultation plus to require the Government to consult, co-operate and reach agreement with the LGA. That will provide accountability and transparency by requiring the Government to publish their responses to all proposals; to publish an action plan; to lay reports on progress annually before Parliament, which meets the point raised by the right hon. Member for East Yorkshire; and to enable local authorities, for the first time, to request a transfer of function from one body to another if they believe that it will better promote the sustainability of their local community. I will give the reassurances that were asked for regarding the transfer of functions and money, based on the advice and definitions that I have been given.

Oliver Letwin (West Dorset, Conservative)

Before the Minister does that, I hope that he is not under the illusion that new clause 3(3) has the effect that I think he was just describing. It does indeed mandate a report to Parliament, but only on the action plan, not on the transfer of functions and money.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

I am grateful to the right hon. Gentleman. He is right and that is an important point. Under my measures, the codification of the process that the Bill provides for has the advantage of allowing proposals to come forward that are based not simply on the local spending report—important though that is—but on other considerations, an example being a local organisation that is failing to meet the agreed objectives within its area.

I did not respond in detail to Mr. Hollobone, but he has given us a very good example of how that process could be used. One of my frustrations is that it is often forgotten that a police authority is of course itself a local authority under law, and is itself accountable to local councillors. Somewhere along the line, some local councillors have forgotten that point, although I am not suggesting that the hon. Gentleman's have. This is not Government policy—yet—but my personal view is that the link between police authorities and the executive leadership of councils needs to be strengthened, partly to meet those points. A very important benefit of the Bill is that if the hon. Gentleman's local police authority were aware, as it will be, that the local council had powers to make such proposals to change function, I suspect that it would come quickly to the table to discuss a way forward. That would be especially true if it was clear through the representations of the Member of Parliament, as it would be in this case, and of the local authority—in the traditional, perhaps informal manner—that the Secretary of State was minded to agree, which, on many such occasions, I imagine they would be. In other words, the very existence of this process, combined with the other measures, will bring better co-operation locally and act as an incentive. However, if the hon. Gentleman drops me a line, I shall certainly try to help him to sort out the parking in Kettering, for example. Of course, we did devolve these powers.

Oliver Letwin (West Dorset, Conservative)

I do not want there to be a lack of clarity on this issue. I hope that the Minister recognises that as far as we are concerned, the question of the report is very much unfinished business. The question whether the Secretary of State has to come to Parliament and list all the decisions on spending where he has said no is very material. It is material because doing so is what would embarrass a Secretary of State who had just given a blanket "no" to everything. Without that, there is no embarrassment factor and the force of new clause 6—or, as the Minister is now saying, new clause 1—would be diminished.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

The report to Parliament regarding the action plan is provided for. The right hon. Gentleman is raising a question about the report to Parliament on requests for transfer of functions. The answer to that question is yes, and there is the added benefit of parliamentary questions, of course. The right hon. Gentleman looks sceptical, but the embarrassment factor on any Government is a function of the strength of feeling at local level. The stronger the feeling at local level, the greater the embarrassment of the Secretary of State of the day in refusing such requests. There is no attempt in my proposals not to provide for accountability and reporting to Parliament, and I believe that I have covered the issue in my proposals on the reporting of the decision on functions. [Interruption.] The right hon. Gentleman is shaking his head. If he is not convinced, we perhaps need to debate this issue further, although I am concerned as to how we do that. The other place might want to look at the Bill and to make changes, and we would have to be very careful that such changes were desirable and that the Bill's further progress was not thereby inhibited. So let us be clear this morning about what we are achieving.

The processes covered by new clause 1 require the Secretary of State to invite local authorities to make proposals that they consider would contribute to promoting the sustainability of local communities. Such proposals could cover, among other things, policy change, changes to the law and changes to funding arrangements. They may also include a request for a transfer of functions from one person to another. If a local authority proposes to make such a request, it should of course consult, and under my proposals it must consult both the person whom the functions relate to and the person whom it considers the functions should be transferred to. Before making any proposal, a local authority must have regard to the matters specified in the schedule. The Secretary of State must issue the first invitation within a period of one year, beginning with the day on which the Bill, once enacted, is passed. That is the length of time that I believe would be required to put the structure into place.

Philip Hollobone (Kettering, Conservative)

On a point of clarification, subsections (2) and (3) of old clause 5, in the Bill as drafted when it left the Committee, said that principal councils may not make recommendations regarding services of a "wider or national significance". As I understand it, those subsections are now going and are not being included in any of the clauses that the Minister is introducing.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

I believe that that is correct, and that was certainly my intention. Of course, the problem is similar to the one that we found when we examined how one in practice produces a local spending report. Many financial decisions are local, regional and national, and a similar point applies to the functions, policies and proposals under discussion. I do not imagine that through this process, Kettering council will often be writing to the Secretary of State about foreign policy and other such issues. However, I have to tell the hon. Gentleman that we get lots of such proposals from councils—of all political persuasions. In fact, those on foreign policy normally come from my own party.

Philip Hollobone (Kettering, Conservative)

I do not anticipate Kettering borough council making any representations about foreign policy. However, if what the Minister said is accurate, there could be a representation from, say, Northamptonshire county council, which looks after local roads, regarding taking over responsibility for a road that comes under the remit of the Highways Agency. Such a move might help local development proposals. My understanding is that the Bill as now drafted would allow for that.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

That is absolutely right. It is both my policy intention and, I am told, the practical impact of the measure, and that is desirable, especially when combined with the powers to co-operate in the Local Government and Public Involvement in Health Bill, although I do not want to over-egg those, because they are duties to co-operate in setting goals. The processes to achieve such functions, in so far as they exist at the moment, are cumbersome, bureaucratic, opaque and the stuff of late-night red boxes full of immense detail. They benefit neither the Government nor the local area. The right hon. Member for East Yorkshire is not in the Chamber, but I could wax lyrical about the Bridlington harbour board, where the development of Bridlington was delayed because there was no set process. The hon. Member for Kettering gives us a good example of what can happen.

Let me make the position on Wales clear. We all have the idea that we should empower Wales to apply the Bill's measures if it wants to. To that extent, the Bill covers Wales. However, as a result of an amendment tabled by the hon. Member for Ruislip-Northwood, the Bill was changed in Committee on 23 May. The Government of Wales Act 2006 and the local government Bill give power to the Assembly to legislate in many local government matters. I am advised that the Assembly could enact a version of this Bill, and I will need to discuss that with my colleagues in the Welsh Government. In essence, the Bill does not impose itself on Wales, but measures taken in the 2006 Act and the local government Bill, should Parliament adopt it, will allow the measures in this Bill to be taken up in Wales. That is an important matter for my hon. Friend Nia Griffith and others. It is one of those devolved matters on which we have to decide whether we should tell the Assembly how to act. The same problem arises with the interaction of the proposed local panels.

Roger Williams (Shadow Minister (Rural Affairs), Environment, Food & Rural Affairs; Brecon & Radnorshire, Liberal Democrat)

I thank the Minister for that explanation. Some funding of functions, such as the police service, is based in Westminster, but some of the problems could be addressed by moving funding from the police service to other authorities. We need to consider the situation in great detail. It is not relevant to Wales-only legislation alone, but England and Wales legislation as well.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

The hon. Gentleman makes an accurate point on police funding. Policies on police funding, in particular the precept, where some powers rest in Cardiff and some in London, require the Welsh Assembly Government and the UK Government to get their act together, which we successfully did eventually for police funding for this current financial year.

On the core of the difficulties raised by the right hon. Member for West Dorset and the hon. Member for Ruislip-Northwood, the latter places great importance on including a specific provision to enable local authorities to request the transfer of function from one body to another. That is his first issue. I have made that provision in subsections (2) and (3) of new clause 1. Following on from that, he has three concerns. One is that replacing clause 5 with my provisions rather than his will disrupt the narrative—the understanding—of the Bill. As I said, I have some sympathy for that, but it is the integrity of the legislation and its consistency that concern me. That will be important in the other place. We must be able to show that the Bill is consistent.

Should new clause 1 be adopted, I would be more than happy to work with the hon. Member for Ruislip-Northwood—indeed, I would welcome it—to develop a broader narrative, in the wider sense of the word, to explain the Bill to local authorities and the wider public in documents or other material in plain English. This is a useful opportunity for me to make a point about plain English, although I know that he is not criticising us in that regard. Mr. Beith said that part of the problem with engaging the public is the language that we and public institutions use. Anybody who attended the Adjournment debate last night on the north-east regional spatial strategy would have needed a masters degree in public administration to keep up with it. It was difficult enough just reading out my speech. The subject of the debate of my hon. Friend Helen Goodman is hugely important to the north-east, but the language used was impenetrable. I take my share of the responsibility for that. We want to explain the Bill in plain English, so that the public understand it and do not have false expectations.

I shall now turn to a more substantive objection. New clause 6 allows local authorities, having considered information in a local spending report, to

"make a recommendation to the Secretary of State for a transfer of functions from one person to another."

It goes on to say that

"the Secretary of State must either adopt and implement...or reject the recommendation"

within six months, and that if functions are transferred

"the moneys for the discharge of those functions shall also be transferred"

and

"any local authority to which the functions are transferred may determine the policies to deliver the objectives of the function".

The difficulty with that is that, in effect, local authorities would decide how any public money in their area should be spent and how any public functions should be delivered. If they could not convince their local partners to agree, they would call in the Secretary of State to arbitrate—and, they would hope, to take their funding and functions off them. That is not only impractical, but undesirable for the following reason. It would require the Secretary of State to step into any number of local disputes between local partners. The Secretary of State's remedy would be to compel the transfer of one body's functions and funding to a local authority. In that respect, the measure would strengthen the hand of the Secretary of State to determine what happens locally. Therefore, it would create further centralisation, not devolution.

There is also concern that the Government's drafting and process for achieving the transfer of functions does not include funding. That is simply a drafting point. The function includes the finance; we are very clear about that. If a proposal were made about transfer of a function, it is extremely likely—and would, therefore, most often be the case—that it would cover a proposal about moving funding. A proposal covering transfer of function and movement of funding would clearly, therefore, fall within new clause 1. That is not only my view; it is also the view of the lawyers.

Oliver Letwin (West Dorset, Conservative)

I am grateful to the Minister for that. What he has said will be important in the context of Pepper v. Hart and so forth. Will he confirm that what he meant to say in his last remarks is that if a local authority applies for a transfer of functions and applies for a transfer of funding, a Secretary of State in granting the transfer of functions would be granting the transfer of funding?

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

Yes, that is the consequence. It is one of those rare examples where the law and common sense are the same.

Let me make a point about the production of a local spending report that identifies the money that is spent locally—such as the Kent £9 billion, although it was £8 billion when this was first explained to me, so it appears to have increased by £1 billion since then. I think that it actually has increased by £1 billion since then. Let me explain one of the advantages of the Bill. First, at present most of the £2.5 billion that is Kent's is in fact mine—it is ring-fenced. Secondly, some of the remainder is within the control of Kent at the margin, but most of it is not. There is also the crucial point raised by my hon. Friend Lynda Waltho. I urge Members to trust the processes set up in new clauses 1 and 2 because what they do is square the circle that devolutionists always face between equity—the point that my hon. Friend addressed—and devolution, which the Bill addresses. The hon. Member for Ruislip-Northwood put his finger on it when he said that it is the judgment of the outcome that matters. How unemployment is reduced in Kent or elsewhere is not the fundamental issue. The fact that it is reduced is the important thing.

Under the framework of the Local Government and Public Involvement in Health Bill and the comprehensive area assessment, it is up to a local authority and its partners to decide on the setting of local targets. Where it is clear that a function is failing, the local authority should be given the right to make a representation to transfer the function so that its objectives can be met. That proposal can come from anywhere, not just from the local spending report, under new clauses 1 and 2.

The example of the youth club given by the right hon. Member for West Dorset is important. Another example has been given to us by the hon. Member for Kettering. Let me give the House a further example. Among the schemes that aim to reduce reoffending among young offenders who come out of borstal, the most effective that I am aware of are provided by the fire service. Crudely put, if we put a young bad lad in the fire service, two weeks will sort him out. The non-offending rates from those programmes are remarkably successful. However, it is not the job of the fire service to reduce offending. That is something that it does out of partnership, common sense and good spirit. It is extraordinarily difficult, under the present arrangements, for the local probation service and the police to give money to the fire service to provide that facility, even though the benefits from the work of the fire service result in savings to police budgets.

I shall give one more example before I come to my argument about why new clauses 1 and 2 are better than new clause 6. Within the local government family, there is the brilliant example of the Blackburn slipper. We discussed this in Committee, and I apologise for repeating myself. The purchase by social services of new pairs of slippers for pensioners in Blackburn resulted in a reduction by a half in admissions to the local accident and emergency hospital for broken bones caused by falls. For the cost of a new pair of slippers, the local hospital saved a fortune, yet the local hospital is not allowed to give money to social services for those purposes under the present arrangements. I believe that new clauses 1 and 2 make more sense because they deal with a process of proposals from communities and individuals relating to the decisions of local authorities, set against the framework of their own objectives, not ours.

Oliver Letwin (West Dorset, Conservative)

We are getting close to the nub of the argument. Let us return to the Minister's example of the Blackburn slipper. If a transfer of functions were sought from the NHS, or a public health aspect of the Department of Health, to the local authority to enable the local authority to provide the slippers, would the local authority have the power under new clause 1 to achieve the objective of improving public health by a means which the body giving over the function to the local authority would not have been empowered to engage in itself? In other words, in this case, would the local authority be able to give the slippers to the pensioners if the body from which it was getting the function and the money had not had the power to do so under its own remit? If the answer is that it would have those powers under new clause 1, we are where we need to be. If, as I suspect, the answer is no, and the local authority would be constrained to doing only those things that the body from which it derived the functions was able to do under its vires, new clause 1 does not quite get to where the Minister and I want to get.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

The right hon. Gentleman is rightly asking probing questions because we need to be clear about these things. He is asking about the transfer of the social care function, but does he mean from the local authority to the hospital or—

Oliver Letwin (West Dorset, Conservative)

indicated dissent.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

From the hospital to the local authority?

Oliver Letwin (West Dorset, Conservative)

indicated assent.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

In that case, the answer to the right hon. Gentleman's question is yes; we believe that we achieve that objective.

At the heart of the policy is the desirability of changing financial arrangements at local level. It is clear from evidence from the health and social care sectors that preventive money is the way forward. As a nation, we must be able to spend money on prevention as well as on acute services, but the existing architecture does not allow us to do that sufficiently. We could all give many illustrations of that point; for example, the same arguments apply very much to early years. Evidence shows that intervention in the early years can save significant sums in teenage life. If we provide problem children with child care, Sure Start and other back-up mechanisms, we save three times as much as we spend over an 18-year period. The problem is that the agencies making such decisions have, of course, to abide by the law and by financial imperatives; they are not free to act in the best interests of the case.

I concur with the right hon. Gentleman about the objective, but I shall explain a bit more. I can tell from his expression that I have not yet convinced him and I want to do so. Under new clause 1, if a local authority wants to recommend a transfer of funding or function, it may do so, but through the selector. That point may have posed a difficulty, so I shall explain the process.

The selector is a person who is representative of local authorities. If the selector believes that the local authority has a strong case, they would include that recommendation in the shortlist of proposals. The Secretary of State would be duty bound by my proposed new clause to co-operate with the Local Government Association, which is a significant change since Committee. Furthermore, the Secretary of State would then have to consider the proposal. We shall be considering related amendments, but I can see the House is getting restless so I shall move quickly on.

If local partners cannot settle their differences, the issue should be taken to a sector body—the selector. In my view, it should not be referred directly to the Secretary of State. It is not practicable or desirable for the Secretary of State to intervene in every local dispute by taking functions from one body by force and placing them with another. That is not how we see the relationship either between local partners or between the Government and local partners.

In short, the proposed new clause—which I think comes from the Committee even though it is in my name—would allow proposals in any context, not just that of the local spending report, important though it is. It would provide a practical process and a framework for decisions, which would avoid the danger of mischievous or vexatious proposals—although I do not believe that would be common—and would give the public the reassurances they need. I hope that I have convinced the right hon. Gentleman.

Oliver Letwin (West Dorset, Conservative)

The Minister is being generous and his comments will be useful in the debate that follows, but may I try to get absolute clarity on the point? Let us take the earlier example about the Highways Agency and a road. A local authority makes a proposal for the transfer of functions in relation to the management of the road, and it has to do so through the selector. My hon. Friend Mr. Hurd and I have no problems with that, and I do not think our colleagues on the Liberal Benches do either. Let us suppose that the selector selects the proposal and it thus goes to the Secretary of State, who says yes. The Minister has clearly said—for which I am grateful—that if the function of running the road transfers from the Highways Agency to the local authority, the money devoted to running it will transfer, too. That is very good.

I come to my next question. I do not know what existing statutes say about the duties and powers of the Highways Agency, but if it is charged under those statutes to run the road in a certain way and if the transfer of function occurs and the whole point of seeking the transfer of function was that the local authority wished to achieve the same objective of transport sustaining the community properly, but in a way that is not provided for in the legislation governing the Highways Agency, will the local authority, once the transfer of functions has occurred, be able to run the road in a different way from the way in which it was run by the Highways Agency? That is the nub of the issue.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

The right hon. Gentleman asks perhaps the most important question. The Government's policy intention is to achieve that. I cannot give him an absolute guarantee because one would have to look at statutes right across the board, but we believe that our drafting reflects the policy objective. The great beauty of having parliamentary counsel is that they tell us how to meet in law our policy objectives. [ Interruption. ] That is what they do; the first parliamentary counsel is very clear about that.

If, for example, there was something in highways law and we needed to change the legislation, we would obviously have to come to Parliament. The beauty of the Bill is that it provides the process by which that must happen. At the moment, local authorities and other local agencies have the frustration that there is no clear process for them to achieve their objectives. The Bill will make their ability to do that more effective. The hon. Member for Kettering has given us a really good example. In practice, the Highways Agency would come to the table at the local level and address the problem.

Let me give the right hon. Gentleman another assurance. In law, the "Secretary of State" does not mean just the one Secretary of State; we are talking not just about the Secretary of State for Communities and Local Government, but about the Government, which includes the Department for Transport. The benefit of the process is that it not only brings a greater ability for local people to see that they can get their will done, but improves the way in which we govern. That is what we are attempting to achieve.

I think that I have convinced the right hon. Gentleman on two out of three points. He and the Bill's promoter are sceptical on the third point but, on balance, I hope that they will accept my argument.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

Will the Minister give way?

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

I said earlier that I would give way for the last time; this really is the last time.

David Howarth (Shadow Minister (Energy), Trade & Industry; Cambridge, Liberal Democrat)

I thank the Minister for giving way. Does he agree with the following summary? New clause 1 allows the transfer of powers from any authority to another authority, but it cannot overcome any prohibitions that are on the authority in the first place. In other words, one would need new legislation to expand or change the powers, or to get over an existing prohibition, but existing functions could be transferred from one authority to another in the sense of powers.

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

If I have understood the hon. Gentleman correctly, the answer is yes. As I said in Committee, on the transfer of function the Government's objective is to provide much greater flexibility in how local agencies can achieve objectives. That is at the heart of the Bill.

If an authority wanted both to transfer and to change the method by which it did something—it would want to do that; otherwise who was doing it would be the only issue—and the change in method came up against a problem with the existing law, we would obviously have to deal with that. However, that is the case anyway because a problem arises if a local body cannot carry out a function because the law is in its way. Local people and local authorities will have the opportunity to use a process to do something about the situation.

Let me return to a point that was made on Second Reading. There is no compact with local areas in this country. We have one with employers and employee representatives, so we understand that concept, although it has differed over the years and parties have different views on the form that it should take. The Bill provides for a compact with local areas.

I will try to reassure hon. Members on both sides of the House. The Government's existing central-local partnership with the Local Government Association involves voluntary meetings. Indeed, the LGA is a voluntary body, which was why we had difficulty when drafting the selector proposals. Another advantage of the Bill is that because it locks in the relationship between the Government of the day and the LGA in a mutually beneficial manner, it gives councils a powerful reason why they should be members of the LGA. The substance of that relationship will be based in law, although one cannot legislate for how the relationship works in practice.

Hon. Members might not be aware that as part of the central-local partnership, the LGA meets not only my Department, but all the Departments in Whitehall. A side benefit of the Bill, albeit an important benefit, is that the association will be given real meat. We all want a strong LGA.

Nick Hurd (Ruislip - Northwood, Conservative)

rose—

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

I said that I would not take any more interventions. However, as the hon. Gentleman is the Bill's promoter, I must give way.

Nick Hurd (Ruislip - Northwood, Conservative)

I am very grateful to the Minister for that and for the constructive way in which he has focused his remarks on the concerns that have been expressed. I put on record that I do not intend to press new clause 6 to a Division because he has convinced me that our policy objectives are alive.

Will the Minister briefly address a possible understanding? Someone reading new clause 1 might think that local authorities will have a one-off opportunity to make recommendations on the transfer of functions. The intention behind new clause 6 was to make it clear that information on public spending would be published regularly so that local authorities could respond to it. The opportunity under new clause 6 would not be time-dated, but new clause 1 seems to provide for a one-off invitation of submissions to a national action plan. Will the Minister clarify his intentions?

Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East & Saddleworth, Labour)

The process will go on until Parliament says otherwise. I understand why the hon. Gentleman asks his question because new clause 1(5) states:

"The Secretary of State must issue"—

I inserted the word "must" at the request of the Committee for the purpose of clarity, although legislation usually includes the word "may", even when the Government intend that something must be done—

"the first invitation under this section within the period of one year".

The word "first" should reassure the hon. Gentleman.

It is proposed that reports be produced at least annually. I want to create a framework based on the Bill that will give local authorities a clear process to allow them to say that they want consideration to take place. I will even call it the Hurd process, if it helps me to get the Bill through the House. I commend the Government amendments to the House and ask the hon. Gentleman to consider withdrawing new clause 6.

Nick Hurd (Ruislip - Northwood, Conservative)

I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.