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Contracting Out (Functions relating to the Royal Parks) Order 2016 - Motion to Approve

– in the House of Lords at 7:36 pm on 24th October 2016.

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Moved by Lord Ashton of Hyde

That the draft Order laid before the House on 21 July be approved.

Relevant document: 8th Report from the Secondary Legislation Scrutiny Committee

Photo of Lord Ashton of Hyde Lord Ashton of Hyde Lord in Waiting (HM Household) (Whip), The Parliamentary Under-Secretary of State for Culture, Media and Sport

My Lords, the Government are proposing to use the powers in the Deregulation and Contracting Out Act 1994 to contract out the direct management of the Royal Parks estate. The functions are currently performed by an executive agency, a directorate of the Department for Culture, Media and Sport, which reports directly to the Secretary of State. Under the proposals we are debating today, the ownership of the estate will not change and the Secretary of State will still be accountable for its management.

The Royal Parks are at the heart of London and it is difficult to imagine the city without them. They are integral to the identity and life of the capital and the country, are enjoyed by 77 million people each year and enjoy a satisfaction rating of 98%. You may ask: if the parks are performing so well, why change things? The paradox is that to ensure that the parks remain as they are—outstanding free amenity spaces for all to enjoy—the means of managing has to change if we are to ensure that these outstanding public assets are protected for the long term. The current operational, governance and management arrangements need to be revised to enable the parks to operate more effectively and plan better for the future.

When the Royal Parks Agency was established in 1993, almost all its funding came from the Exchequer. The situation has changed: taxpayer funding is now around just 30%. The rest is mostly self-generated, and we need to change the model to ensure that the Royal Parks are able to plan effectively for the future. As currently constituted, the agency is not able to build up a reserve, carry over income from one year to the next, or fully benefit from the opportunities offered by commercial income. Under the proposed arrangements, the new organisation will be able to plan for the longer term rather than on a year-by-year basis, and operate more efficiently, for the benefit of the parks and their visitors. A single charitable body will make a more compelling case for support to corporate sponsors, private donors and charitable trusts, as well as attracting new volunteers.

The existing charity, the Royal Parks Foundation, already fundraises for the parks. Merging the charity with the new organisation will bring an alignment of objectives. The foundation’s board supports this move. The foundation board and the agency’s advisory board have provided sterling support and direction over the years The new organisation will be a government company with charitable status, whose draft charitable objects focus on protecting the intrinsic qualities of the parks, including their environmental benefits, and offering high-quality services to visitors. The objects of the new charity will be closely aligned with the statutory responsibilities of the Secretary of State.

There will be a contract between the Secretary of State and the new charity, which will set out what it must do in return for the funding provided under the contract. The contract makes it clear that the new charity must maintain its green spaces, buildings and structures to high standards. The Government will continue to monitor the charity’s performance and review the contract every five years.

I also make it absolutely clear that the Royal Parks will remain free to visit. The Government will continue to provide funding. I also reassure the House that this proposal is not about the commercialisation of the Royal Parks; rather, it is to allow the parks to use their income and assets more effectively for the benefit of the estate and park visitors. The organisation will continue to be subject to planning and licensing control by local authorities. There will not be year-round rock concerts or any net loss of green space to new developments. It is appropriate, as we approach Christmas, to mention Winter Wonderland, which occupies a small parcel of Hyde Park and is immensely popular, attracting more than 3 million people each year, many from overseas, bringing income to London and money for reinvestment in the parks. This event takes place at a time when Hyde Park was traditionally rather empty of visitors. We already have Winter Wonderland; this proposal will not mean the addition of summer, autumn and spring wonderlands. Hyde Park will not be host to a 52-week-a-year funfair.

The Government expect the new charity to continue to identify ways in which assets can be used in positive, creative and, most importantly, appropriate ways. The agency has closely engaged with representative groups and the proposal has been discussed at regular meetings over the past 12 months to which friends’ groups, concessionaires, partner organisations, key agencies, local residents’ groups, local businesses, MPs and local councillors are invited. The proposal was discussed at a meeting of the friends’ forum last week, and there was broad support for the new status, given its aim of bringing long-term financial stability to the parks and ongoing investment into the estate. “Meet the park team” events—the equivalent of town hall meetings—have been held in each park, widely advertised locally and through social media, thereby speaking individually to park visitors not represented on formal stakeholder groups.

There have been extensive meeting and consultation events with staff from both the agency and the foundation. There are no current plans for redundancies and there are roles available for all permanent staff within the new organisation. The Greater London Authority is represented on the project board and local authority leaders are represented on the Royal Parks advisory board, which supports the change. Most recognise that the proposal is seeking to bring long-term financial stability to the Royal Parks estate. The Secretary of State is in the process of appointing trustees to the board of the new organisation. Other appointments will be made by the Mayor of London and will include local authority leaders. The Royal Household will have ex officio representation.

The only area of land that is managed by the agency but is not in the ownership of either the monarch or the Government is Grosvenor Square Garden, which is owned by the Grosvenor Estate. This order would allow the Government to contract out the direct management of that square to a third party, such as Grosvenor, but only on the condition that it remains a free public amenity for the benefit of all. The parks will continue to be policed by the Metropolitan Police Service. Any changes to the park regulations will continue to require the approval of Parliament.

To conclude, the proposal is evolution rather than revolution and enables the parks’ operating model to reflect the realities and opportunities of today. What the public see and experience in the parks will not change dramatically but will provide a sustainable financial future for them, and this measure helps deliver that. Subject to Parliament’s agreement, it is envisaged that the new arrangements will take effect on 1 March 2017. I beg to move.

Amendment to the Motion

Moved by Lord Stevenson of Balmacara

At end insert “but this House regrets that the Government have not sought or gained public support for the draft Order, that they have failed to carry out an effective consultation with the staff affected and that they have failed to explain how the body proposed by the draft Order would meet greater financial commitments while not destroying the balance between protecting the historic environment of the parks and maintaining their security and allowing commercial activities in the parks.”

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, I am grateful to the Minister for setting out the rather slim rationale for the proposal to contract out the management of the Royal Parks, replacing the Royal Parks Agency, by setting up a company limited by the guarantee of the Secretary of State. The 8th Report of the Secondary Legislation Scrutiny Committee, chaired by the noble Lord, Lord Trefgarne, is the proximate reason for this evening’s debate, although I think we would have had some questions to ask had this gone through the normal process.

I have four main areas of concern. First of these is the company. The DCMS proposes to contract with a new organisation which will be a company limited by guarantee of the Secretary of State, and which will apply for charitable status. All the parks are in London. Was consideration not given to whether it would be more appropriate to transfer responsibility to the Mayor of London on this occasion? If not, why not? There is very little information in the statutory instrument or the Explanatory Memorandum about the company itself, although we gathered a little bit more when the Minister was speaking. What type of company is it? Was consideration given to setting it up as a community interest company, because this would have been one area which would have avoided some of the problems they are likely to have with the Charity Commission

There was mention of the board, but we do not have any details of its size, whether there will be a good gender balance, or diversity issues. There was talk of statutory appointments being made from local authorities and the Mayor’s office. This is good, but it would be interesting to know who the chair is to be and whether any other appointments have been announced. I note that it is a company limited by guarantee. In this case, there must be formal documentation and I would be grateful if the Minister could make that available, perhaps through the Library.

The Minister said that it is hoped to start the arrangements on 1 March, although the statutory instrument states that the order comes into force on the day after the day on which it is made. I note, in passing, that that is not one of the common commencement dates, which is to be regretted. More seriously, what happens if there is a delay in the establishment of the charity? After all, the company is not just applying for charitable status, albeit that can take time; it is merging with an existing charity as well, which is often rather a tricky operation, as I am sure the Minister is aware. If there is a delay, will the transfer happen on 1 March? If not, what are the standby arrangements? What are the tax implications of the change? No mention was made of this. In particular, what is the VAT position after the transfer? As a government agency, the Royal Parks Agency is not liable for VAT, but surely as an independent company it will be? Who is going to compensate the new organisation for that considerable loss?

The Minister tried to give a very full account of what has happened on consultation, but there has not been a formal consultation exercise and the Secondary Legislation Scrutiny Committee was quite scathing about that. It is true that DCMS has responded that,

“engagement with key stakeholders and the wider public has shown broad support for the proposal”.

This apparently involved the proposal being discussed “over many months” at a series of meetings attended by friends’ groups of the Royal Parks and other visitor representatives, concessionaires, elected representatives and the police. The DCMS also says that local authorities bordering the estate that are represented on the Royal Parks Advisory Board, and the Greater London Authority, “are fully supportive”. I think I heard the Minister say that local MPs had been invited to attend these meetings. Given that large numbers of London residents and visitors from elsewhere use the Royal Parks, does the Minster not agree that failure to consult properly on this rather radical proposal does not match the high standards we should expect on such matters from all government departments? The lack of a proper public consultation process also means that an opportunity to spread the word about this change has been missed, with the result that there can be no certainty that these major changes will be welcomed by many current and future users of the parks.

I turn to commercial pressures. In the Explanatory Memorandum, DCMS says that it is not the intention to permit the Royal Parks to become “overly commercialised”. Can the Minister explain what those words mean? For instance, will Parliament see the contract, so that we can properly assess whether the new organisation will have the obligation to maintain and enhance the quality of the parks? Can he assure us that the new organisation will continue to be subject to all the existing statutory designations relating to environmental protection and management?· Will the by-laws and charging regime continue to be approved through secondary legislation? If that is the case, has he considered that, given that we are losing direct control through the Secretary of State of the Royal Parks, it might be appropriate to change this from negative approval to affirmative approval in future.

In the Explanatory Memorandum, DCMS states that the Royal Parks Agency currently generates almost 70% of its own income—most of which is from Winter Wonderland, which the Minister talked about—with the balance covered by grant-in-aid from HM Treasury. It says that, under the proposed contracting-out arrangements, the Government will provide resource funding and capital investment to the new organisation—that will be welcome—but it will also be able to raise funds, perhaps through sponsorship and commercial activities. It expects that, in the longer term, this will reduce the burden on the public purse—no surprises there. So what capital and revenue commitments have been made and over what period? What are the targets that have been set? Are we expecting these bodies to move to 100% self-funding within a reasonable time? If so, will Parliament be consulted about that?

Finally, I turn to staff. It is very good that there have been no compulsory redundancies in the transfer. I gather that all but a few staff will be transferred under the TUPE regulations, and will retain their pension arrangements and pay scales. What will happen to new joiners after the transfer? It is not always the case that the existing arrangements are offered to them and that would be unfortunate. The staff work in a very high-security area. We are all aware of the incidents that have taken place in the Royal Parks. In some cases, such as the garden of Downing Street, which is serviced by the current arrangements, there will need to be high-security clearance. How will this be arranged in future when the company is independent? Will we be given some details on that?

In introducing the order, the Minister asked what I am sure was a rhetorical question—namely, if all was going so well, why change it? In my view, he comprehensively failed to answer that question. I beg to move.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, I too thank the Minister for introducing the new proposals. I am pleased that we have the opportunity to debate them. We on these Benches are not opposed in principle to contracting out to a new charity formed for the purpose, rather in the way that the creation of English Heritage seems to have become a success. I think we are all pleased that Loyd Grossman, with his profile and experience, has been appointed as its first chair. That is considerable cause for pleasure. Moreover, I understand that, broadly, friends’ groups across the Royal Parks support the change and see it as bringing the following benefits—greater financial freedom and escape from government restriction, for example, on the carrying over of end-of-year surpluses, and on procurement rules, both of which can lead to higher costs. It also gives them rather more flexibility on pay rates—upwards, as it happens—in order to attract staff. The change means that it is easier to raise money, especially through local philanthropy, and the new objectives provide—they say—more focus on protection and conservation and less on government objectives for higher visitor numbers.

I understand that the new draft objectives submitted to the Charity Commission are principally to promote the use and enjoyment of the Royal Parks, to protect, conserve, maintain and care for them, to maintain and develop the biodiversity of the Royal Parks and to support the advancement of education and promote the national heritage. All those objectives have considerable importance and benefit. However, it would be good to see the entire draft constitution of the new charity. There is remarkably little information available about the new structure, especially given that it is to be merged with the Royal Parks Foundation. The noble Lord, Lord Stevenson, talked about how the board will be appointed. I understand that there will be 14 board members, half of whom will be appointed by government. It is not clear who the other half will be appointed by. We need a much more plural form of appointment and there needs to be considerable local input into those appointments. An ability for the Government to appoint 50% of the trustees of the new charity seems well over the top. In the way that the Government retreated over the BBC, I hope that they will likewise retreat over the appointment of trustees to this charity.

I hope that these new arrangements will also mean that detailed plans are drawn up for each of the individual Royal Parks. I think we all know which Royal Parks we are referring to but it is not so well known that other open spaces such as Brompton Cemetery, Victoria Tower Gardens, just along the way, and the gardens at Nos. 10, 11 and 12 Downing Street are all currently managed by the Royal Parks Agency. I assume that they will continue to be managed by the new charity.

I was only partially reassured by the Minister’s statements about consultations that have taken place. As the noble Lord, Lord Stevenson, pointed out, they were very local consultations. The Royal Parks are an asset to not only the whole of London but also the nation. Therefore, it sounds to me as if the consultations have been extremely limited. On what basis were the consultations held? Was a draft constitution of the new charity available? Is there a new draft corporate plan? That kind of detail is very important when one is consulting on a dramatically new way of managing the Royal Parks.

Where is the draft contract? As a lawyer, I always like to see a draft contract, lots of red ink and so on, but we have not seen anything to do with the future management of the Royal Parks. That was referred to by the Minister. What are the key performance indicators in terms of the management of the parks? What specific targets are to be set for the management? On future strategy, will there be a new corporate plan? The Royal Parks Agency has carried on a very detailed way of planning for some considerable time, which includes separate management and operating plans for each Royal Park and, in addition, a sustainability strategy. In the light of the new objectives of the charity, that is extremely important.

The noble Lord, Lord Stevenson, rightly referred to finances. The parks are now expected to make nearly 70% of their own income, but more than 30% still comes from government grant. All the statements coming out of government in this regard seem rather ominous. The stated aim in the Explanatory Notes is to reduce the burden on the public purse in the longer-term. Will that level of finance continue? After all, the latest annual report of the Royal Parks Agency states:

“The new charity will be increasingly self-sustaining”.

The advertisement for the new chairman states that the new body will apparently seek to,

“generate substantial annual revenue from more events, concessions and licences”.

I heard what the Minister said about events, and that seems to contradict it. What does all this mean for government support and over what period? In the way that the finances for English Heritage have tapered, do the Government plan a tapering of the finance for the new charitable body? Or will they essentially oblige the new body—as the Royal Parks tried to do previously—to impose fees for use of its football pitches? I have another very large question: who will pay for the £56 million maintenance backlog detailed in the most recent annual accounts?

The Minister gave several assurances about events. I suppose we should be pleased that there is no Summertime Wonderland but it seems that even the existing events—Winter Wonderland and the British Summer Time Concerts alone, including the time for setting up and reinstating the grass—put 13% of Hyde Park out of bounds for much of the year. Therefore, frankly, I do not think there is much leeway for more events. Will there be more open-air cinema screenings? I know that that causes problems for local wildlife in Richmond Park. What will the financial pressures be if the Government taper their support?

There are many questions and not enough transparency about these proposals. I hope that the Minister has all the answers.

Photo of The Earl of Clancarty The Earl of Clancarty Crossbench

My Lords, I thank the Minister, and the noble Lord, Lord Stevenson, for tabling his amendment. This has been quite a technical debate so far but I want to raise how this measure will affect the public, and take a longer-term view.

In March it was reported in the Guardian that the Royal Parks Agency said that the move to a new body followed decreased government funding that had made,

“maintaining high standards increasingly challenging”.

The Friends of Richmond Park note that public funding as a proportion of all income has fallen from 95% in 1961 to under 50% today. Therefore, the fundamental question I want to ask the Government—I think the Minister has already answered it—is: how is a separate body going to supply that much-needed funding, with diminishing support from the Government, other than through commercialising the parks themselves? Why is the move necessary other than to further cut ties to state funding? I therefore echo the noble Lords, Lord Stevenson and Lord Clement-Jones, who asked whether we are heading for a 100% funding cut from the Government. It certainly looks that way. This is surely what “broadening opportunities” means.

In a sense, the evidence that this will be the case already exists, since the sad truth is that this legislation confirms a trend which has been ongoing for many public parks, including the Royal Parks themselves. For instance, we have council-run parks now charging for fitness classes and running in parks and, three years ago, after a separate body became involved specifically in the management of Hyde Park, a decision was made to charge for playing ball games there. After a public outcry, that decision was reversed.

The plain fact is that the more public funding is cut and private management comes into play, the more the public will be treated as consumers rather than the users of public space, and public spaces will become less public. I disagree, for instance, with the Royal Parks’ decision to restrict the use of photography, particularly amateur photography. Of course, probably thousands of photographs are taken every day in the parks on mobile phones. Photography is a normal aspect of the use of public space. However, unless you are talking about a complicated film shoot, this costs nothing in terms of the disruption of the normal use of the parks.

In other ways the Royal Parks get things right. It is good that—currently, at least—they allow picnics and the consumption of alcohol, which I think is fine. The parks are maintained to a good standard. I have nothing against the occasional big event, which in fact goes back a long way; some noble Lords may recall being present when Mick Jagger released butterflies in Hyde Park, which would possibly not be considered a good idea for the ecology of the parks today. Today’s Proms in the Park are also very popular. However, this legislation will inevitably introduce a new level of commercialism, which will not necessarily be sensitive to the need for the parks as properly public spaces if at the same time these much-loved spaces are to be maintained, wildlife is to be protected and the historic environment is to be respected. The wider public should be consulted on this change.

Photo of Lord Berkeley of Knighton Lord Berkeley of Knighton Crossbench 8:00 pm, 24th October 2016

My Lords, I agree with all the speakers who have pointed out that the Royal Parks have done a good job up until now. They are quite wonderful places to visit. However, I was concerned by the report from the Secondary Legislation Scrutiny Committee on two points in particular. It says:

“Given that there has been no public consultation process, however, we question whether the changes in prospect are widely known among the large numbers of people who use the Royal Parks, including London residents and visitors from elsewhere; in the absence of such consultation, we question whether it is appropriate to assume that the proposal will be readily welcomed by many users of the parks”.

I use all the parks a great deal and have done all my life. I am ashamed to say that I did not know about this proposal until I caught it in the business of your Lordships’ House. Would it not have been an idea, for example, simply to put a sign on the noticeboards which solicited inquiries from people who might like to contribute? If that has been done, I am sorry that I missed it. Also, as somebody who lives very near the park, I did not receive any mail on this subject.

The Secondary Legislation Scrutiny Committee made another point:

The House may wish to press for more detail of the regime that will apply to the future management of the parks, given that reference to ‘broadening opportunities’”— which many noble Lords mentioned—

“inevitably raises questions about the balance between protecting the historic environment of the parks and allowing commercial activities in them”.

I speak with some authority here as a musician; I completely endorse what the noble Lord, Lord Ashton of Hyde, said—perhaps he should be “of Hyde Park” now—about public access to large events. It is perfectly true that a lot of people can experience an artistic event; we heard reference to the Rolling Stones—I went when I was a young man—and this is a laudable thing. However, I am worried that we are close to saturation point in Hyde Park in particular. I go there virtually every day, and in the easterly part of the park North Carriage Drive has to be closed. It is not just about getting the park ready for rock concerts, Proms in the Park and Winter Wonderland but about the closing down of the event and then the reseeding of the area. This means that a huge part of the park is virtually a no-go area for park visitors for quite a large part of the year. If this were to increase in any way, the whole ethos of that open space—somewhere people can visit and be quiet—could be severely damaged.

I raise these points for the Minister mainly to be taken into consideration and perhaps to be amplified still further. I understand that what he is saying is largely financially driven and I understand the need for that. Other noble Lords who have spoken know more than me about the efficacy of going down this route. However, while I endorse wider public access to events, I am nervous. It is hard for someone who runs parks such as these not to think, “We could make a few more bucks by having yet another rock concert”. A certain amount of detail is required to make sure that this does not happen. It is not spelled out enough.

Photo of Lord True Lord True Conservative

My Lords, I declare an interest to your Lordships: first, I am a member of the existing Royal Parks board; and I am also leader of Richmond local authority, which has the privilege of containing some of the most beautiful spaces in this country in the form of the Royal Parks within my borough. Having declared the first interest—as being part of the outgoing organisation—I should make it clear that I am very mindful of the Addison rules. It is not for me to rise in this House and answer the questions that have been asked about the management and future management. Under the rules of this House, those are matters for the Minister, and I am sure that he will answer those points adequately. However, perhaps I may allow myself some general reflections.

I understand that the noble Lord opposite simply does not like the order. That is probably because it has the words “contracting out” in its title. However, some of the services that we have heard about relating to the management of buildings and grounds are already provided by organisations which are contracted out, so no great principle frontier is being crossed here; it is a question of the management.

The noble Lord, Lord Clement-Jones, was very supportive in the first 90 seconds of his speech but not quite so supportive in the remaining 10 minutes. I think that that comes from an understandable suspicion. People love these parks and do not want to see their ethos change. That has always been the guiding principle of anybody who has spent any time trying to support and sustain these parks. However, changing their status was not necessarily something that the Government were pushing for or particularly enthusiastic about in the earlier stages. As I conceive it, the idea is to try to give the parks a status that will enable them to thrive in providing the facilities that they have provided for so long.

In passing—again, without trespassing into saying inappropriate things in this House—I remind noble Lords that these are Royal Parks, and that in itself is something that the House might want to bear in mind.

On the question of the preservation of ethos, the point was made about not wanting too much in the way of entertainments. Again, without going into specifics—clearly, I recognise some of the things that have been said in relation to Winter Wonderland—the point is that local authorities will remain planning authorities. So for major functions, even if this new body—I can tell your Lordships that I have not applied to be a member of it—turned out to want to have knock-down, drag-out rock concerts every day, they simply would not get away with it because the local authority would be all over them. As far as functions in Hyde Park are concerned, I can tell the House that local authorities are all over the park, so I do not think that that fear would come to fruition. I and most of the others involved certainly would not support the change if we thought that that was the way forward.

It is true that the parks have moved to raise more money by means other than government funding. I think that that has been prudent, and it has been done in a way that broadly retains the ethos of the parks. I think that this is a case of damned if you do and damned if you don’t. If you sit there and say, “We’re not going to do anything”, and, in the light of what we all know is likely to be the ongoing financial situation, you expect the good old taxpayer constantly to go on providing, you are damned for not having used the talent you have been given to try to improve things. However, if you do try to use that talent, you are damned because you are being too commercial. Before and after I was involved, the parks have tried to find a balance, and I am sure that that is what will continue to happen.

I cannot stray too far into the issue of consultation as, again, I am conscious of the Addison rules. However, I can say from my own experience that when there was a proposal to close several gates in Richmond Park, people were all over it very fast. News travels if an adverse proposal is out there. So I think that the Minister needs to answer the questions that have been legitimately asked in the committee’s report and by noble Lords here. I have not become aware of a great storm of concern, but I am sure that the Minister will listen to some of the suggestions about how things might be done better.

On balance, I think that the parks will still be in a safe place under the proposals before us. I believe that the reserve powers of the Secretary of State will still be in place and that there will be careful scrutiny of the contracting arrangements. I do not think that Parliament can supervise KPIs or every detail and point of the contract. As I understand it, there are no plans to move away from the broad strategies that have been set out. Therefore, given the very careful thought that has been put into this measure and the need to reach out to more and more people around the world who love the parks, I think that the new arrangements, if they become charitable arrangements, may enable the parks to be secured.

While fully understanding the concerns that have been put forward by a number of noble Lords—concerns that I would share if I were in their position—I believe that a good way forward will be found. Brompton Cemetery is subject to a massive programme of improvement with a HLF grant, and those kinds of things will, I am sure, continue. I hope that the noble Lord opposite will withdraw his amendment and that, subject to the Minister satisfactorily answering the questions that have been put forward in the debate, the order can be approved.

Photo of Lord Ashton of Hyde Lord Ashton of Hyde Lord in Waiting (HM Household) (Whip), The Parliamentary Under-Secretary of State for Culture, Media and Sport

My Lords, I thank all noble Lords who contributed, especially the noble Lord, Lord Stevenson. He has raised some worthwhile points in his amendment, which certainly deserve an answer, as have other noble Lords. The best thing is for me to start by addressing the points in his amendment, and then I will come on to some of the other questions that have been asked.

The first thing to say is that the Government have no desire to change the overall experience of the parks. We think that this proposal will encourage the parks to take a longer-term view and, as the noble Lord, Lord Clement-Jones, pointed out, some of the more long-term abilities of not being a government department on an annual budget will allow them to raise more money, which I will come to in a minute. There is absolutely no desire to commercialise the parks more than they are now. I will come on to some aspects of financing in that respect later.

We want to satisfy the noble Lord, Lord Stevenson, that the proposal does have widespread support and will protect the integrity of the Royal Parks. His amendment regrets that the Government did not seek or gain public support for the proposal that the draft order will allow. In fact, the parks agency has gone out of its way to seek the opinions of as many users, residents, businesses and organisations as possible. The change in status has been discussed at regular meetings over the past 12 months, to which friends groups, concessionaires, partner organisations, partner agencies, local residents groups and local businesses were invited. MPs and local councillors were also invited.

As I said before, there have been town hall-style meetings at each of the parks, and the noble Lord, Lord Berkeley, will be pleased to hear that those were advertised by park posters—I am sorry that he did not see them. In other words, those meetings were targeted at visitors to the parks. Posters were also sent to 29 libraries and 329 schools across seven boroughs, with information sent to 90 local media outlets. Importantly, the meetings were also advertised through social media. There are 77 million visitors to the Royal Parks, so I accept that we may not have reached all of them. However, there has been a concerted effort to try to consult as many people as possible.

There have also been extensive discussions with staff. It is fair to say that there was overall satisfaction and general consensus that the proposal—that the Royal Parks should be run by a charity on behalf of the Secretary of State, rather than by a government department—would ensure the delicate balance of operational freedoms and ongoing public accountability.

We have worked very closely with the London mayor’s office and the Greater London Authority. In answer to questions about the composition of the new board of trustees, the mayor will have six nominations to ensure that a democratic and pan-London perspective is at the heart of everything it does and its decision-making.

The noble Lords, Lord Stevenson and Lord Berkeley and others, regret that there was no effective consultation with the staff affected. But staff in both organisations have been considered and consulted on the proposed changes as they developed. Staff representative bodies have been regularly briefed over the past two years. The first major staff meeting was held in January 2015. Monthly staff consultation meetings have been running since the spring of this year and there are monthly bulletins. I am pleased to say, as I said before, that roles will be available in the new organisation for all existing employees.

Finally, the noble Lord feels that the Government have failed to explain how the charity would balance the commercialisation of the parks with the protection of their historic environment. Let me be clear that there is no assumption nor ambition at the moment that the parks will continue their great work without public funds. The proposal to create a charity to manage and maintain the parks is to allow them to operate outside the restrictions of public accounting regulations, which the noble Lord, Lord Clement-Jones, mentioned. That freedom will allow improved strategic planning of the parks to ensure the better protection of this historic environment—things such as being able to hold a reserve or carry over money from one year to another, none of which they can do as an executive agency. This will allow a longer-term approach which will enable them to have more long-term partnerships with other fund-raising organisations.

The regulation by the Charity Commission ensures that any of those reserves are spent in the best interests of the charity in line with its charitable objects. It will not allow unfettered commercialisation of the parks. Allowing the charity to carry over funds from one year to the next will also allow the more effective long-term strategic planning to which I alluded previously.

There has been a lot of talk about the commercial activity in the parks, predominantly Hyde Park. As my noble friend Lord True said, this is currently regulated and controlled by the licensing authority, Westminster City Council. The Royal Parks currently work, and will continue to work, closely with Westminster and the other licensing authorities to ensure the integrity of the parks. Their prime function as free-to-visit green spaces and centres of excellence in regard to their landscaping, horticulture and public amenities will not be compromised by overcommercialisation. The 2014 self-imposed limit that the Royal Parks currently has of the number of commercial events will not change. In fact, it has not even got to its limit. Therefore, the combination of licensing laws and its own self-imposed limit will prevent them extending their commercialisation.

On Hyde Park, which in many ways is the hub of the commercial activity, major activities on the part called the parade ground—where large events have been happening for hundreds of years—take up only 13% of the park, leaving 87% of it open and accessible. The parade ground is closed to the public for the safe-build and break-down events for the equivalent of 12 weeks per year, which is not excessive. In fact, 83% of local residents support summer concerts when they are told that the proceeds support the park; and 80% of local residents support Winter Wonderland. As I have mentioned, these are all subject to local licensing requirements. I think I have now said enough on Hyde Park.

The noble Lord, Lord Stevenson, asked why the company was not set up as a community interest company. This was considered in the option appraisal but was not considered the best option. The Royal Parks is in active consultation with the Charity Commission, which is comfortable with the arrangements we have at the moment.

The noble Lord also referred to parliamentary scrutiny and changes to park regulations being made by affirmative statutory instruments. Parliament will continue to have oversight of the park regulations. We consider that the current oversight is proportionate to the regulations in question. Another factor is that changing the power from a negative to an affirmative resolution would require primary legislation.

On the question of whether the new starters will be treated in the same way as the current staff who are moving over, it will be comparable. It will be a high-performing organisation, but it will not be exactly the same because we are not able to provide to the new group of joiners continued access to Civil Service pensions. There will be a small difference there.

The noble Lords, Lord Clement-Jones and Lord Stevenson, talked about security arrangements for key Royal Parks staff—for example, the gardeners of No. 10 and No. 11 Downing Street. Under the new arrangements exactly the same security clearance procedures will continue to apply. Gardeners who are accredited to work in the gardens at No. 10 will continue to go through exactly the same level of detailed security clearance by the police. In fact, the same people will continue to do the job and security clearance will continue in exactly the same way by the police.

Questions were raised—indeed, there was some confusion—about the trustees of the new charitable trust. Ministers will make seven of the 14 board appointments, including the chair, who will have a casting vote in the event of no majority. These appointments are regulated by the Office of the Commissioner for Public Appointments, so it will be an open and fair competition. Moreover, the Mayor of London is able to make up to six appointments, and he will include local authority leaders in those, while the Royal Household has one ex officio nominee. I think the noble Lord, Lord Clement-Jones, mentioned that Loyd Grossman is going to be the chairman. The rest of the board has not been announced yet, but that is to happen soon.

In respect of the governance arrangements, the Mayor of London is comfortable with this proposal. On the question of why it was thought best not to hand this arrangement over to the mayor, he provides no actual funding at all for the Royal Parks; despite that, he and his representatives have been closely involved in the changeover. He is happy with it and he will have six out of the 14 members of the board. There is no loss of VAT and it is tax neutral. I believe that there will be a change in the budget to make sure that that applies.

The noble Lord, Lord Stevenson, also asked what happens if this is delayed beyond 1 March 2017. We have been in dialogue with the Charity Commission for the past year so we do not anticipate that happening, but if Charity Commission approval is not obtained by that date, that would not necessarily prevent the transition to a publicly owned company but it would mean that some of the benefits for the new organisation would be delayed, such as being a single, focused organisation, because the current Royal Parks Foundation transfer can happen only once charitable status is achieved. We do not anticipate that happening, but if it did it would not prevent the changeover.

Turning to finance, of course it is easy to be cynical and say that this is all intended just to save money. It is certainly true that we anticipate that over the next few years, the amount of government funding will move from roughly 30% of the annual income to around 20%. As I have said, there is no plan at the moment to remove government funding. The Government are there to provide it if necessary; indeed, to show our commitment, we have provided an extra £10 million in capital money in 2016-17 to the Royal Parks to enable them to develop things such as the new nursery in Hyde Park, which will benefit all the Royal Parks. I reassure noble Lords that there are no plans for the parks to be fully self-financing. The Royal Parks will remain free for all. The Government will continue to provide funding and the new charity will allow the parks to spend money for the greater long-term benefit.

The agency’s corporate plan is published on its website and the corporate plan for the new charity will be agreed by the new board and will also be published. Ultimately, the rationale is to make the parks more sustainable in the long term and not to dramatically commercialise them. We think that they will be able to do things better and raise more money because they will be able to plan on a more long-term basis and carry reserves. I hope that my explanation will have satisfied the noble Lord somewhat and will allow him to withdraw his amendment.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education) 8:30 pm, 24th October 2016

I thank all noble Lords for their contributions. I think that we have all had our eyes opened and learned things that perhaps we might not have done had we not put forward the amendment. I will have to go and look up the Addison rules—I am sure that I need a tutorial on that as well. They clearly curtailed much of what we could have heard from the noble Lord, Lord True. I am sorry about that, but if that is the rule, it is the rule.

If government has a function in doing something, it surely should not just will the ends and not provide the means. It should think more carefully about how such things can be run. I gather from the Minister that the reason for what is proposed is essentially that the present arrangement under which executive agencies operate cannot provide the sort of funding, support and operational freedoms that are judged to be in the best interest of the Royal Parks. That seems to be a sad reflection on government’s ability to do the sort of things it wants. It is not that I am against this; I just think that it is important that we understand some of the motivations around it. I take it that that is really what is happening, because there are opportunities to work differently, to fund differently and to retain funding in a way that is simply not possible under the government system. One could perhaps take from this debate that there is a bit of a problem if government as a whole cannot do this. What could be more interesting than to discover that my rather winged shot on tax should have revealed a Budget secret so early in the season, if indeed the Budget is going to contain measures for the way in which executive bodies are dealt with in the tax system under a new set of constitutional arrangements? I suspect that local authorities and others might be interested in how that has happened and that the smile on the face of the noble Lord, Lord True, is redolent of the fact that he is going to go off and check what is going to happen—I jest slightly. If that is what is required to achieve something which the Government think is necessary, again my point is made.

On the points that I raised and were picked up by other noble Lords, I do not think that the consultation reached the standards that we want. That the Minister was able to say that 80% of people supported Winter Wonderland and to cite other high percentages shows that some consultation is taking place on specific issues. It is a bit odd that it was not done here. Simply putting up notices for casual visitors walking their dogs is not quite what I had in mind. I am glad that the staff were consulted—indeed, I had a helpful meeting with senior staff from the agency, who persuaded me that I was wrong to assert that that was not the case, so I accept what the Minister said about that.

The issue of the Charity Commission as regulator to which the Minister referred is of course a problem for all bodies that are in receipt of public funds; it is not specific just to the Royal Parks. The public good that is done with the funds that come from government often has to be supplemented by funds raised in a commercial operation—when I was at the British Film Institute, it was an issue that we had to balance all the time. We received about £15 million in public funding then—it is about the same now—but we raised nearly £10 million through ticket sales and by selling books, magazines and videos. We always had to be careful that the commercial imperative did not drive the onus in the statutes of the body. In this case, it would be the new charity. It is not unreasonable for Parliament to be assured that this will be a transition within which such verities are retained.

I hope that I did not give the impression that I was against what is being done. What I want is brilliant public parks, fantastic public spaces and for London to be enhanced and supported by them. I do not object to the commercial activities around that—although they are not all commercial; they are fun, enjoyable and have added a new dimension. It would be wrong for that to get out of proportion. One way in which that could be prevented would be for the Minister to go through some of the points that have been made today and write to us, and perhaps put a note in the Library about some of the issues that he was not able to cover. I think that we would then feel reasonably satisfied that we had given this matter good scrutiny and that the arrangements in place were not so awful as to be resisted at this stage.

I am supported by thousands of people on my Back Benches here who want me to press for a vote on the order and to take it down, but on this occasion I have been persuaded by the arguments. I beg leave to withdraw the amendment.

Amendment withdrawn.

Motion agreed.

House adjourned at 8.34 pm.