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Schedule 1

Business Rate Supplements Bill – in a Public Bill Committee on 27th January 2009.

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Information to be included in a prospectus for a BRS

Amendment proposed (this day): 35, in schedule 1, page 22, line 16, at end insert—

‘11A A description of the arrangement by which persons paying the BRS shall be represented upon the governing body of any organisation set up for the purpose of delivering the objectives of the BRS, or if, such organisation is not to be set up, how such persons are to be involved in the oversight of the delivery of those objectives.’.—(Robert Neill.)

Question again proposed, That the amendment be made.

Photo of Dan Rogerson Dan Rogerson Opposition Whip (Commons), Shadow Minister (Communities and Local Government)

When we adjourned, I was drawing to a close my remarks on the amendment tabled by the hon. Member for Bromley and Chislehurst, regarding some body that would have oversight and ensure that business had a role not just in supporting the business rate supplement and, of course, funding it, but in ensuring that the way in which the project was taken forward had the benefit of business insight and experience.

Although the proposal in the amendment would no doubt need a great deal of refining regarding how such a body should work, who should be represented and so on, it is helpful. I shall thus listen with interest to the rest of the debate before deciding whether to support it.

Photo of Philip Dunne Philip Dunne Opposition Whip (Commons)

I support the amendment tabled by my hon. Friend the Member for Bromley and Chislehurst, along with myself and other Conservative Committee members.

During the evidence sessions, I was struck by the fact that, at the outset, the Minister indicated that he was keen to listen to representations and willing to take on board those that appeared to make a positive contribution to improve the Bill. It is in that context that I support the amendment.

One of the factors that has led to the success of business improvement districts is the active engagement of those who are taxed in the implementation of the measure for which the tax has been raised locally. One of the major drawbacks of the Bill is that there is no mechanism for the businesses that consent through ballot to be charged in this way to have some involvement in the delivery of the project. It is not just about those businesses being a voice on a decision-making body. They also feel that they can help to ensure that the  project will be delivered on time and on budget. That is what businesses do, or seek to do, day in, day out, when managing their activities. That is also what the Government seek to do when introducing measures—particularly large infrastructure projects—although I regret to say that Governments of any hue are not perhaps as successful in achieving the delivery of major infrastructure projects on time and on budget.

It would be interesting if the Minister could, from his ministerial experience, mention any projects of such a scale that have come in on time and on budget without the involvement of significant figures from the business world to help push them through. That is not to cast aspersions on the quality of either the ministerial team or its civil servants, who are responsible for implementation, but the harsh fact is that they are, by definition, less experienced in delivering major projects than the private sector. That is why this matter is important and why I am pleased that my hon. Friend has moved an amendment that would enable consideration to be given to allowing business a voice at the table and, thereby, allowing a role for them in ensuring the delivery of the project. They do not need to take the lead role, but their advice will be available if they have a seat at the table, and one would hope that that would help achieve the objectives of the levying authority that has succeeded in securing the charge.

Now the Minister is in his place, I shall repeat what I said at the beginning. He said graciously in the evidence sessions that he would be willing to listen to representations made from outside bodies as well as Opposition Committee members. I hope that he will take on board the intent behind the amendment. Although it might not be as skilfully drafted as he might wish—I am sure that my hon. Friend the Member for Bromley and Chislehurst would accept revisions or alternatives—we would like to hear the Minister’s response to the intent behind the proposal.

Photo of Brian Binley Brian Binley Conservative, Northampton South

I support the very important remarks made by my hon. Friend the Member for Ludlow, who has had a distinguished business career and is well versed in the work of business generally. I listened this morning to lots of argument and many claims of intellectualism. I am a practical man, as most business men tend to be, and that practicality is the very essence of the need for business to be involved. We have enough intellectualism to keep us going for many years—much of it sitting in this House. One of the things that we lack in this place is a practical and pragmatic approach to problems and the world of business generally. For the Government to eschew the opportunity for practical business involvement in any project that a local authority may wish to pursue under the Bill seems to be looking a gift horse in the mouth and refusing it.

I have already made the point that previous Government projections, both national and local, for sizeable infrastructure projects have been, in most people’s eyes, deplorable. I do not wish to embarrass the Government—this Government or previous ones, frankly—by going through a list of projections that proved to be so way out on their final total as to be embarrassing. We do not have to get started on the process of the Olympics to any great extent to know that to be the case. Crossrail saw sizeable increases in financial projections, and I do not believe that we are at the end of the game yet. The  Government’s performance is decidedly poor in this area, yet there is an opportunity now to involve business, which is considerably more adept at the process. I hope that the Minister will accept the arguments made by business itself to be involved in the process and welcome the proposal with open arms.

This Government have talked a great deal about open government and transparency in government, yet they are now closing down the financial and management aspects of a given project from the very people who will be called on to pay quite a lot of money in support of that project, even though the expertise in the business sector far outweighs the expertise in that respect in government. This Government were specifically concerned about scrutiny in local government. They specifically made the point that there should be wider involvement in scrutiny—involvement greater than that of the elected members themselves—and provided the opportunity for other bodies to be involved in the whole scrutiny process of local government, yet now the Government are closing that down under the Bill. May I remind the Minister that we are talking about the possibility of sizeable private finance initiative projects linked to the tax? We have not explored that in great depth.

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

Order. The Chair has to take a pragmatic view of the hon. Gentleman’s speech and he is getting well out of order. This debate is about the schedule on what goes into a prospectus.

Photo of Brian Binley Brian Binley Conservative, Northampton South

With respect, Mr. Atkinson, I seek your guidance. I thought that the debate was about amendment 35. I put it to you with all the good manners that I can muster that my remarks are relevant to the amendment. However, I will take your advice and wind up—that is what you are saying to me in a gentle way.

To reiterate, there are those with skills in the business sector who would be willing to become involved in the scrutiny of such a project and to offer their expertise, knowledge and experience. If I am offered cheap expertise at that level of importance, I take it with alacrity, and I hope that the Minister would too.

Photo of Sadiq Khan Sadiq Khan The Parliamentary Under-Secretary of State for Communities and Local Government

I take all offers of cheap advice that I am given, and I take the hon. Gentleman’s contribution with the good grace with which it was given. The hon. Members for Northampton, South, for Ludlow, for Bromley and Chislehurst and for North Cornwall all raised the same point in their contributions on this amendment: we need to take on board the expertise in the business sector. As my right hon. Friend the Minister for Local Government said during previous sittings of this Committee, that is clearly our intention.

The hon. Member for Bromley and Chislehurst spoke about a process of dialogue, partnership and collaboration. That is our intention as well. The amendment, however, would limit local flexibility. I listened carefully to the reasons why it was tabled. My concern, notwithstanding the comments made, is that if we are not careful, we here in Whitehall and Westminster will add further bureaucracy and prescription. That said, we all know that there is a 12-week period of consultation on the draft guidance. We will look at the comments made and, if need be, come back to the measures.

We in the Labour party believe in devolving power to local authorities. We believe that the power to make decisions regarding areas should rest at the spatial level that is best placed to know and understand the facts at hand. My concern is that the amendment would require levying authorities to set out expressly in their prospectus how they will involve stakeholders in the delivery of BRS objectives. That implies that levying authorities should set up a BRS governing board.

The Bill sets out a flexible framework with safeguards within which local authorities should operate to levy a BRS to fund a project aimed at economic development. It already requires levying authorities to set out in their prospectus how they will provide business with information about progress on a BRS-funded project, notwithstanding the fact that we are consulting on the draft guidance and will listen to the comments made by business.

On Second Reading and during the course of this Committee, we have discussed that BRS may be used in many different ways to fund many different projects. Each local authority—rural local authorities and those in urban areas—will have developed in partnership with local business a project and prospectus particular to its needs and long-term vision.

Every area is different and has different needs, different levels of partnership, and different resources at its disposal. It is vital that we provide local authorities with the flexibility to set up and tailor their own governance procedures for projects, just as we expect businesses to innovate rather than allowing central Government to impose a way of governing their businesses. For example, a project might be managed by a few key local businesses or by the services of an outside contractor—I know that that is a particular concern of the hon. Member for Northampton, South, who has mentioned the private finance initiative on a couple of occasions—and each would require a different method of governance.

I accept that clear governance procedures that involve local business should be set out, but the amendment goes further and would limit flexibility. We should not bind the hands of local authorities and businesses in managing their projects.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

I am grateful for the spirit in which the Under-Secretary is responding. There might not be a great deal between us in practice. I understand his concern that we might reduce flexibility, but I ask him to consider that the wording of the amendment, although not necessarily perfect—I am open to suggestions—posits two situations. The first is that a special purpose body or organisation is set up to deliver the BRS. The prescription is that there should be some representation on the governing body, whatever that may be. Secondly, to meet the point made by the Under-Secretary, this can be done through an existing organisation, contractors or whatever. If such an organisation was not set up, a statement would have to be made in the prospectus on how business was to be involved in the delivery. That would not tie hands to such a degree, and I hoped that that might address his point.

Photo of Sadiq Khan Sadiq Khan The Parliamentary Under-Secretary of State for Communities and Local Government 4:15 pm, 27th January 2009

That intervention was really helpful. This is not our last chance to amend the Bill—the House will have other opportunities. I shall speak to officials, having  taken those comments on board. I understand the tenor of the hon. Gentleman’s comments and those of his colleagues and the hon. Member for North Cornwall. My right hon. Friend the Minister for Local Government has said the same thing in different words—as someone said, less illuminating. I shall consider the point. For those reasons, I respectfully ask the hon. Member for Bromley and Chislehurst to withdraw the amendment.

Photo of Bob Neill Bob Neill Shadow Minister (Communities and Local Government), Deputy Chair, Conservative Party

I am grateful to the hon. Gentleman for that response. I hope that we can pursue the matter in the way that he suggests, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 agreed to.