Clause 17
Local Government and Public Involvement in Health Bill
5:45 pm
Phil Woolas (Minister of State (Local Government & Community Cohesion), Department for Communities and Local Government; Oldham East and Saddleworth, Labour)
The hon. Gentleman has made an entirely fair and reasonable point about residuary bodies. Indeed, I remember representing an employee of a local authority that had been abolished under the previous process. He had been employed to count the number of oak trees in the area and had then been employed subsequently by the residuary body. It took some seven years to unwind the contract, during which time the number of trees had not changed. That is the stuff of employment tribunals.
Clause 24 deals with the contracts that local authorities may enter into during the period. A probing amendment has been tabled to the provision, which hopefully we shall debate. The clause under discussion enables the Secretary of State to establish one or more corporate bodies to take over property, rights, liabilities and the functions of those local authorities that cease to exist as a result of either structural or boundary changes. They are the residuary bodies to which the hon. Gentleman refers.
The use of residuary bodies is not, in fact, common. We do not expect that there will be a requirement for residuary bodies in this round of restructuring. However, it is prudent to allow a power to the Secretary of State to provide for them until the precise implementation arrangements for each new authority are known. I am sure that members of the Committee will wish to ask questions about such matters when we reach that stage in the Bill.
A residuary body could be used, for example, to take responsibility for any property, liabilities or functions not transferred to the new authorities because we do not expect that they will be required within the configuration. For example, following a reorganisation, if there is property surplus to the requirements of the new authority, it might be more appropriate to transfer it to a residuary body responsible for the property’s maintenance until it is disposed of. The residuary body would meet the costs out of its assets, and the net proceeds would be returned at the end of that period to the new authority. That approach was taken in the 1980s when the metropolitan counties were abolished. There were residuary assets, and the Committee can probably guess by now where the tree counter was employed.
Subsection (2) will allow the Secretary of State to make provision relating to a residuary body, including provision for its constitution, membership and power to borrow and lend money. It will also allow the Secretary of State to require such a body to submit to him or her a scheme for its own dissolution, because by definition residuary bodies are intended to have ashelf life.
Subsection (3) provides for the Secretary of State to transfer any property rights, liabilities or functions of a residuary body to any other body and provides for him or her to give effect to a scheme for the dissolution of that residuary body. Subsection (4) provides that the Secretary of State may make any incidental, consequential, transitional or supplementary provision, in particular those mentioned in clause 15, which relate to the modification and so on of an enactment.
The clause therefore provides for the Secretary of State to establish residuary bodies as the result of an order for structural and/or boundary change under clause 7 or 10, whichever contains the relevant procedure. That is the intention. As I said, it is not envisaged that that will be required under the window of opportunity, but it might come up through that route or through boundary changes resulting in structural change. I therefore think it sensible for the Committee to adopt the clause.