Clause 66
Regulatory Enforcement and Sanctions Bill [Lords]
1:00 pm
Pat McFadden (Minister of State (Employment Relations and Postal Affairs), Department for Business, Enterprise & Regulatory Reform; Wolverhampton South East, Labour)
The hon. Member for Hertford and Stortford said that I might, in responding to the debate, end up pointing him to another part of the Bill that covered some of the issues before us, and he is correct. I point him to clause 60(1)(c), which says that the relevant authority—as we have said, that will be a Minister—must consult
“such other persons as the relevant authority considers appropriate.”
I also point him to the guide to the Bill, which we have published and distributed. Page 28 says:
“For local authority regulators the Government will look to LBRO for advice on whether, in a particular regulatory field, local authorities in general are Hampton compliant.”
We have therefore drawn attention to the issue not only under the general duty on consultation elsewhere in the Bill, but in the guide, and that covers one part of what the amendment is intended to do. As the guide makes clear, a Minister who intends to award the new sanctioning powers will look to the Local Better Regulation Office for advice.
I want, however, to raise a point about the second part of the amendment. Clause 66 says that a Minister can award the powers in the Bill to regulators if he or she is satisfied that the regulator will exercise them in accordance with the principles of good regulation, which we have discussed several times. However, new subsection (3) in amendment No. 45 could give local authorities a year’s grace, in that they could use the sanctions without complying with the principles of good regulation until the end of that year.
The Government would have a problem with that because authorities that are not Hampton-compliant could be given the powers in the Bill on the basis of a projection that they might be compliant some time in the next year. There is also the question of what would happen in a year’s time if that judgment proved not to be well-founded. Authorities could have been exercising the powers for a year but might still not be Hampton-compliant. That could create a difficulty. Would the powers automatically lapse? The amendment is silent on that. That could create some uncertainty for regulators and business.
I am slightly surprised by new clause 3 because it would vastly expand LBRO’s functions. As we have discussed, LBRO will have a relatively modest budget and be relatively modest in size. The new clause would ask LBRO to review all 450 or so local authorities every three years. That would be a significant undertaking and would require a big increase in resources, but there is another reason why it goes against the grain of where we are trying to go with regulatory principles. We discussed risk-based approaches to regulation the other day, and we also know that within local authorities—but not only local authorities—there are concerns about the amount of routine, tick-box audit and inspection. A requirement that is not risk-based but includes all local authorities, every three years, would be pulling in a different direction from where we are going more generally with audit and inspection policy.
Clause 67 requires the Minister who makes the order that gives local authorities and other regulators access to the new powers to undertake a one-off, post-implementation review three years after it comes into effect. That is sensible. A measure that made that happen to every local authority every three years would be going too far. For those reasons, we do not want to accept new clause 3.
On the review mechanism in the Bill, the Minister would have to consult such persons as he considers appropriate. When local authorities have been given the powers, the Minister would be expected to consult LBRO. There is also an issue with a different requirement on the compliance code from elsewhere in the Bill. Local authorities will have to “have regard to” the compliance code when carrying out their enforcement activity, including the use of part 3 powers. However, new clause 3 would mean that
“local authorities are compliant with the provisions of any Code”.
We spoke about conflicting requirements on local authorities when we spoke to a previous amendment. “Have regard to” is the amendment that is set down on the compliance code. There are a few grounds on which I hope new clause 3 and amendment No. 45 are not pressed to a Division.
I accept that the hon. Member for Hertford and Stortford is trying to keep those things under review, but the proposals might be only a blunt instrument in that regard and, as I said, they would pull us away from the more risk-based approach that we are pursuing.