3Bpage 5, line 33, leave out from "receipt" to end and insert "to be used by the receiving authority in accordance with directions by the Secretary of State"

The Commons disagree to this amendment for the following reason—

3C Because it would alter the financial arrangements made by the Commons, and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient.

My Lords, I beg to move that the House do not insist on their Amendment No. 3B to which the Commons have disagreed for the reason numbered 3C.

I do not need to repeat what I said yesterday, save for the fact that the Commons gave in its reason numbered 3C exactly the argument that it gave in its reason numbered 3A; namely, that the amendment would alter the financial arrangements made by the Commons. The Commons does not offer any further reason, trusting that that may be deemed sufficient.

Moved, That the House do not insist on their Amendment No. 3B to which the Commons have disagreed for the reason numbered 3C.—(Lord Rooker.)

My Lords, I hear what the noble Lord says about the Commons' privilege, and I am bound to say that I find this an extraordinary reason. Our Amendment does nothing about the revenue support grant for local authorities. It does nothing at all about any of the money that the Government are giving to local authorities.

The argument that we have used all the way through is that the amendment marginally changes the Government's right to redistribute capital already in the ownership of the local authorities to other local authorities that the Government prefer. That was the argument that we made yesterday, and is the basis of the amendment. I had a query yesterday about the amendment on minimum reserves. We must bow to what the Commons puts forward, but I am bound to say that it is an odd argument to make to stop the amendment in its tracks.

We had a disagreement yesterday about how much money was involved. The Minister eventually had to concede that my figure of £120 million was correct and that that was what we were talking about. We were also talking about the right of local authorities to have an idea of what their capital will be spent on, and to not have the money snaffled away from them if they are not in the Government's eyes, as authorities in need, to be able to make a decision that the money should be used for—most likely—housing requirements for key workers, affordable housing and repairs to housing within their own areas.

We have made the point over and again during the passage of the Bill, and have been unable to move the Government, either in this or Another place. We have been supported throughout by the Liberal Democrats, who have taken the same view. We will have been supported by local government across the country, and not only those who would be involved in the "set aside" or those who are debt-free. I hope that the Minister realises that the Government's position is not welcome. It is not one from which they will get any thanks at all from local government.

I believe that I am right in saying that the Liberal Democrats also recognise that we are probably at the end of the road so far as the matter is concerned. Royal Assent is due this afternoon. Because we have this extraordinarily messy sitting of the House—we have had two weeks on, and now have two weeks off—it is impossible to continue a flow on the Bill. I do not propose to take the matter any further, but it is with a heavy heart that I say that the Government, on this as on one or two other measures, will not gain any kudos from what they have done. I believe that those who have been in Opposition to it have had a moral and right argument all the way through.

My Lords, I support the noble Baroness. We have failed to convince the Government on the issue. It is disappointing that, during the progress of the Bill, the Minister tried to mollify us on one of our concerns, which was that local authorities that, we believed, had housing need, would have money taken away from them. The Minister said that if there really was housing need in those authorities, the money would go back to them. What a way to do it. If I read the figures correctly, some of those authorities from which the Government plan to take away a large amount of money will be giving quite small amounts of money back to the Government. If the Government then decide that they have housing need, they will send that money back again. That seems to take bureaucracy to an incredible level and to be really rather unnecessary.

The Government certainly win accolades for setting up new bureaucracies, and that scheme will end up being another example. I do not know whether the Minister will be able to reassure us on the issue or whether he will report back to us at any stage on what happens to that money.

It is particularly sad to see that provision in the Bill. So many freedoms have been given to local authorities. We all agree that we want to see local authorities being able to operate freely to do what they think is right in their areas. However, so much bureaucracy has gone with some of those freedoms. That is incredibly disappointing, and we have another example before us.

Nevertheless, I am not a lawyer, and I have to abide by what others say must happen in this place. We will have to accept the Commons Amendment, but I hope that the situation that I fear will not happen. It would be a waste of central and local government's time.

My Lords, I appreciate that the noble Baronesses are still annoyed and disagree with this part of the Bill but will not take their Opposition any further. I shall make two brief points to set the record straight.

First, I realise that we have argued about the amount of money involved, but as I said yesterday, the Amendment sent by this place to Another place and rejected would have removed the set-aside arrangements that already exist. The amount of money involved is £1.2 billion, not simply the £120 million for debt-free authorities.

Secondly, we are told that we will receive no thanks from local government. We are not looking for thanks; we are looking for partnership and goodwill. Everybody is aware that the major and substantive changes that the Bill brings about in the financial arrangements for local government, which we all want to see operating from the start of the next financial year in April, cannot take place unless the Bill receives Royal Assent today—not tomorrow nor next month. If it does not receive Royal Assent today, those changes, as was pointed out by the Minister last night, cannot come into force until April 2005, not 2004, which is what we all require. It is absolutely crucial that Royal Assent is given today.

It is a free country; it is still a free House. Noble Lords can send the Bill back if they wish and the Commons can have another look at it. They have chosen not to do that, which is sensible in the circumstances. Their arguments have been put on record. The Government will be thoroughly accountable for the mechanism that we use in Clause 11. Parliamentary Questions and debates will elucidate exactly what happens with pooling and the way in which the money is distributed. It is not as though nobody will be able to find out what exactly the Government do in implementing the legislation.

On Question, Motion agreed to.