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Clause 74 - Maximum duration of agreement

Natural Environment and Rural Communities Bill – in a Public Bill Committee at 11:00 am on 5th July 2005.

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Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs) 11:00 am, 5th July 2005

I beg to move amendment No. 74, in clause 74, page 30, line 28, leave out '20' and insert '10'.

I was concerned when I read the proposal for the maximum period—I readily accept that it is a maximum period—for which an agreement may authorise a body to perform a function is 20 years, which is a long time. Schedule 7, which we discussed a short while ago, contains a list of 19 bodies—I am sorry, I said earlier that it was 17. Their functions have changed over the past 20 years. Earlier this morning, we discussed devolution, which has affected a large number of those bodies. The Broads Authority has become more of a national park authority. The whole context of agriculture has moved from a bipartisan policy to encourage self-sufficiency towards decoupled arrangements and a wholly different system of agriculture. Forestry strategy has changed from timber production to amenity and landscape. Wine standards have changed and there has been a proposal to abolish the Wine Standards Board because English wine is now quite good, but 20 years ago it was not considered so. The milk industry has changed considerably. I could go through the list of bodies. The Gangmasters Licensing Authority did not even exist 20 years ago.

I use those bodies as examples to demonstrate what a long period 20 years is. Although we may say today that it is fine to sign up to deliver something in 20 years, it is a very long period. The Minister will almost certainly say that the Secretary of State can terminate the agreements and that clause 72 requires an agreement to be reviewed every five years, so this does not matter. However, 20 years is an exceptionally long time and very few organisations, other than train operators and so on with which we are not concerned, will think about such a time scale. Conservation takes a long time, but delivery of functions, which is what this chapter of the Bill is about, operates on a shorter time scale.

My amendment would reduce the period from 20 years to 10 years. In terms of our democracy, that is, as you know, Mr. Forth, two full Parliaments, which is a considerable period and allows for huge variation in government policy. Ten years is a reasonable period for which to expect any outside body to make a contract, to make a significant investment and to be able to write off that investment in staff, training, equipment, capital   assets and so on. Ten years is reasonable, but 20 years is far too long.

Having said that, I confess that I have not waded through a vast amount of previous legislation and the Minister may tell me, as he did a short while ago, that the period in another Act is 20 years. That would not make it right in this context and that of the delivery of DEFRA's functions to the rest of the community. Ten years is reasonable.

Photo of Jim Knight Jim Knight Parliamentary Under-Secretary (Rural Affairs, Landscape and Biodiversity), Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Rural Affairs, Landscape and Biodiversity)

Mindful of the opening song at Saturday's concert, I will dub this the Sergeant Pepper amendment.

Clause 74 provides for a reasonably long maximum duration for an agreement of 20 years to allow for major delivery operations to be delegated to a suitable body. The clause provides a framework for long-term stability in service provision and confidence on the part of customers and the service provider. We must bear it in mind that much of the Bill refers to work on the environment and, to my mind, 20 years is not a long time in the life of an oak tree, for example, or much environmental management.

The amendment could result in delivery bodies being reluctant to take on functions if the lifespan of the agreement seems not to justify the required investment. In turn, that could hinder the development of joined-up services by bodies such as Natural England. In practice, both parties would agree on an appropriate period for an agreement to suit the circumstances of the function. In many cases, it will be below the maximum period of 20 years.

Agreements will in any event be reviewed by the Secretary of State in the normal course of business. The hon. Member for South-East Cambridgeshire predicts well my arguments. As he said, clause 72 already provides that agreements between designated bodies and other bodies must be reviewed by the Minister concerned at least every five years. That clause will ensure that the arrangements continue to be effective and appropriate regardless of the length of the agreement, and that they reflect the wishes of the Government of the day. As he pointed out, we must be mindful of that as well.

The Bill provides for the Secretary of State to cancel an agreement should it be necessary in the light of such a review, although that remedy would be used only as a last resort.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

In the Minister's opening comments, he suggested that 10 years was not a long enough period, and that the investment might deter some organisations from taking on such an agreement. It is the same phrase that I used—the return of capital investment. Will he give us any examples of the sorts of agreements whereby capital investment would be expected in any reasonable business sense to run beyond 10 years? If it were and if a subsequent Secretary of State were to cancel the agreement, would that not render the Government liable for significant sums of compensation? Would it not be more appropriate, and would it not be easier to go along with the power to cancel, if the agreement were for a shorter period, and included a less open-ended commitment to compensate?  

Photo of Jim Knight Jim Knight Parliamentary Under-Secretary (Rural Affairs, Landscape and Biodiversity), Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Rural Affairs, Landscape and Biodiversity)

To some extent, the hon. Gentleman's argument is logical. I am particularly thinking about habitat restoration projects, in which a function may be delegated to carry out such work. There is such a project of heathland restoration ongoing in my constituency. It is a long-term project to restore the historical heathland to the Purbeck area of Dorset. Cancellation decisions would have to be made as a last resort, because if agreements had been made on the basis of the long-term investment required for such a project, one would have to take seriously the losses that might be incurred and, one would assume, any compensation that might be required.

Photo of Robert Goodwill Robert Goodwill Conservative, Scarborough and Whitby

Surely in those circumstances, if a local wildlife trust, for example, were to enter into an agreement, the fact that the agreement would be renewed regularly would give the trust an added incentive to deliver on it. I suggest to the Minister that a long agreement is less likely to provide that incentive. It is interesting that in his remarks on previous clauses, he talked about the legislation having to stand the test of time. The inflexibility of a 20-year period in the agreements means that it is less future-proof than it would otherwise be.

Photo of Jim Knight Jim Knight Parliamentary Under-Secretary (Rural Affairs, Landscape and Biodiversity), Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Rural Affairs, Landscape and Biodiversity)

In some ways, one could cut the legislation both ways to achieve the same result. We could have either short agreements, producing the friction that requires improved performance, or long agreements, but with the requirement that at least every five years the Minister review the agreement with the power to cancel it. That would provide the same sort of friction to ensure that performance was delivered. One would expect the Minister when reviewing the operation of an agreement to ensure that the agencies concerned were delivering. It is worth making it clear, particularly in respect of clause 72, that the Minister is still accountable. Delivery is being delegated, but accountability is not being delegated at all, and that is why we are keeping the requirement for the review.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I hope that the Minister will agree that there is a slight distinction. He referred to an agreement involving the restoration of natural habitat on heathland or wherever. The investment that I am talking about is not investment in heathland or the oak tree, or whatever it was that he referred to. No one is suggesting that that is a short-term agreement, and we do not want to bring that back just for 10 years. The agreement to which I refer is with a contractor who will deliver. My earlier challenge to him about the investment period was about the investment in men and machines, not the public investment in the countryside for what we hope will be a permanent change to create the countryside of the future. Except in extreme cases such as the railways, most businesses, whether the Wildlife Trust or a private sector organisation, would not expect a contract to run for more than 10 years. I am drawing a distinction between that sort of investment and public investment in the environment. That is the fundamental objective.

Photo of Eric Forth Eric Forth Conservative, Bromley and Chislehurst

Order. The Committee is being run in a fairly relaxed mode, and there is nothing wrong   with that, but interventions are starting to get somewhat lengthy. I remind the Committee that they should be brief.

Photo of Jim Knight Jim Knight Parliamentary Under-Secretary (Rural Affairs, Landscape and Biodiversity), Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Rural Affairs, Landscape and Biodiversity) 11:15 am, 5th July 2005

We are trying to create a framework in statute that is flexible enough to cope with all sorts of agreements. The clause contains the word ''maximum''. When an agreement is approved, I would hope that the relevant Minister would consider carefully its term to ensure that it is appropriate and that we are not contracting for too long a time in the circumstances that the hon. Gentleman describes. However, a maximum of 20 years may be appropriate for the examples that I gave. I hope that, on that basis, he will withdraw the amendment.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I am grateful to the Minister, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 74 ordered to stand part of the Bill.

Clauses 75 to 77 ordered to stand part of the Bill.