Mr Nick Raynsford (Minister of State (Local and Regional Government), Office of the Deputy Prime Minister; Greenwich & Woolwich, Labour)

The amendment deals with the provision by authorities of fire safety advice on a consultancy basis. It would provide an exception to the principle that authorities can do no more than recover their costs, thereby enabling them to engage in the provision of consultancy services on a commercial basis. It includes the restriction that any such paid consultancy must not cut across an authority's duty to provide general fire safety advice. However, I notice that the amendment does not seek the wider safeguards that we provided in the 2003 Act, which required any such trading by local authorities to be conducted through a company structure, so that there was a level playing field in terms of taxation for providers in the public sector and those in the private sector. I suspect that on reflection the hon. Gentleman will probably agree that that further safeguard is necessary if there is to be a genuinely level playing field and if the kind of allegations about which he is reasonably concerned are not to arise.

I am aware that several authorities already have a significant presence in the market for detailed fire safety advice. For our purposes, such work is probably best labelled ''consultancy''. Section 3 of the Fire Services Act 1947 grants authorities wide discretion in the charges that they set for such work, and some have interpreted that as enabling them to charge more than the full cost of giving advice in certain circumstances. The recent Select Committee report noted that further consultation was needed, and clause 6(2) acknowledges the possibility of drawing a distinction between advice that it is reasonable to expect an authority to provide and additional advice that it may offer. Establishing how the distinction should be drawn is a vexed question on which we sought views in the consultation document that we issued earlier this month. I am satisfied that, if such a distinction can be drawn, we already have powers under section 95 of the 2003 Act to allow authorities to trade in consultancy through a company. However, until we have a better understanding of the responses to the consultation exercise, it is premature to attempt to deal further with the matter.

On the hon. Gentleman's specific points, it is not only excellent authorities that will be granted

entitlement to trade under the powers in the 2003 Act. The Government's policy is that weak and poor authorities should generally concentrate on improving their own service performance rather than seek to trade, and we intend to give a general approval to authorities categorised as excellent, good or fair. No decision has yet been taken on whether a comparable regime would apply in the case of the fire service, but the principle that the general trading permission should, to some extent, be related to categories of performance seems right. However, we also recognise that it would not be realistic for the power to trade to be turned on and off annually, depending on a change in category. Some flexibility and acceptance of the ability of authorities to continue at least for a period of time if they suffer a loss of status in the comprehensive performance assessment hierarchy may well be appropriate. Those issues all need to be considered further. Given that explanation, I hope that the hon. Gentleman will accept that the clause is the right way forward.

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